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(Alliance News) - International Consolidated Airlines Group SA on Friday laid bare the damage being caused to travel operators by the Covid-19 pandemic, but still managed to beat market expectations.
IAG shares were up 4.7% at 195.00 pence early Friday in London, the top gainer in the FTSE 100 index.
The British Airways parent, which also owns Irish airline carrier Aer Lingus and Spain's Iberia, swung to a pretax loss in the fourth quarter of EUR1.61 billion from a EUR6 million profit in the fourth quarter of 2019.
IAG posted an operating loss before exceptional items in the fourth quarter of EUR1.17 billion, swung from a profit of EUR765 million a year before. Company-compiled consensus had expected IAG to post a EUR1.25 billion loss.
Total revenue for the final quarter was EUR1.30 billion, down 79% from EUR6.21 billion a year prior. Analysts at UBS had expected this to be around EUR1.2 billion.
For the whole of 2020, IAG suffered an operating loss before exceptional items of EUR4.37 billion, swinging from a EUR3.29 billion profit in 2019. It was forecast to post a EUR4.45 billion operating loss before exceptional items.
Total revenue for 2020 slumped 69% to EUR7.81 billion, while the company swung to a pretax loss, also of EUR7.81 billion, from a EUR2.28 billion profit in 2019. The company turned to an operating loss of EUR7.43 billion from a EUR2.61 billion profit the previous year.
"Our results reflect the serious impact that Covid-19 has had on our business. We have taken effective action to preserve cash, boost liquidity and reduce our cost base. Despite this crisis, our liquidity remains strong. At December 31, the group's liquidity was EUR10.3 billion including a successful EUR2.7 billion capital increase and GBP2 billion loan commitment from UK Export Finance. This is higher than at the start of the pandemic," said Chief Executive Luis Gallego.
Gallego, the former head of IAG's Iberia airline, took over from long-time CEO Willie Walsh in September.
Gallego added: "We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction. We're calling for international common testing standards and the introduction of digital health passes to reopen our skies safely."
Given the uncertainty over Covid-19, including the duration of the pandemic, IAG said it is not providing profit guidance for 2021.
Shares in IAG were up 4.4% at 194.45 pence in London on Friday.
By Zoe Wickens; zoewickens@alliancenews.com
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