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(Alliance News) - British Airways-parent International Consolidated Airlines Group SA on Thursday said Covid restrictions and the resultant crash in air travel hammered third-quarter performance, and the company now expects to fly just 30% of 2019 capacity in the final quarter of 2020.
The FTSE 100-listed company - which also owns Aer Lingus, Iberia, Level and Vueling - said "recent overall bookings have not developed as previously expected" as Europe as imposed additional curbs in response to the second wave of the virus. Local lockdowns, extensions of quarantine requirements and a lack of pre-departure testing or air corridors have not been adopted as "quickly as anticipated" either.
"In response to the high uncertainty of the current environment, IAG now plans for capacity in fourth quarter 2020 to be no more than 30% compared to 2019. As a result, the group no longer expects to reach breakeven in terms of net cash flows from operating activities during fourth quarter 2020," IAG warned.
IAG back in September said it expected fourth-quarter capacity to decline by 60% compared to 2019, so Thursday's announcement puts that at 70%.
Total revenue in the third quarter ended September 30 fell 83% annually to EUR1.2 billion, and IAG swung to an operating loss of EUR1.3 billion from EUR1.4 billion profit a year earlier.
Passenger capacity in the quarter declined by 79% and traffic plummeted 88%. Seat load factor was down 38.8 points to 48.9%.
As at September 30, IAG had total pro-forma liquidity of EUR9.3 billion including EUR2.74 billion of gross proceeds from the capital increase received in early October.
IAG will report detailed third-quarter results on October 30.
Shares in IAG were down 3.0% at 97.48 pence each in London on Thursday morning. Year-to-date the stock is down 60%.
By Tapan Panchal; tapanpanchal@alliancenews.com
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