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LONDON, April 29 (Reuters) - Shares in airline group IAG
fell 3% after the airline group launched a plan to
shrink its main British Airways business, axing staff numbers by
a quarter as it warned of a slow recovery from the coronavirus
pandemic.
With no end in sight for the travel bans which have brought
flying to a near-halt, airlines across the world are facing deep
uncertainty and heavy future losses, and no visibility on how
and when operations can restart.
British Airways could make up to 12,000 staff redundant, its
parent company said on Tuesday, as it forecast that passenger
numbers will take years to recover from the crisis. BA has
45,000 employees, including 16,500 cabin crew and 3,900 pilots.
Traders said that IAG's shares fell due to the warning over
demand and after first quarter results came in worse than
expected. Its stock has lost 64% of its value in the last three
months.
The radical shake-out planned at IAG to help it survive the
coronavirus crisis contrasts with moves at rival big European
airline groups Air France-KLM and Lufthansa,
which are both hoping that government bailouts will see them
through.
Lufthansa said on Tuesday could seek some form of protection
from creditors while talking to the Berlin government about a 9
billion euro rescue package.
But IAG's chief executive Willie Walsh has long-opposed
state-backed rescues for airlines and BA said on Tuesday that
there was "no government bailout standing by for BA".
IAG, which owns Iberia and Vueling in Spain and Aer Lingus
in Ireland as well as BA, has, however, used government furlough
schemes to help pay staff who have been temporarily suspended
while planes are not flying.
Analysts pointed to IAG's strong financial position, it said
on Tuesday it had 9.5 billion euros available at the end of
March, saying that this meant IAG was in a better position
compared to its peers.
"(This) gives some reassurance to investors that IAG will be
one of the survivors and possible long-term beneficiaries of
this current crisis," Goodbody analyst Mark Simpson said.
Earlier on Wednesday Finnair announced plans to
raise 500 million euros ($543 million) through a rights offering
that would be almost as large as its current equity.
(Reporting by Sarah Young, editing by Louise Heavens)
