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(Alliance News) - International Consolidated Airlines Group SA on Friday said it swung to a loss in its first half after a plunge in revenue in its second quarter, due to Covid-19 travel restrictions, as it confirmed an equity raise and announced a successor for Chair Antonio Vazquez.
Shares in the British Airways owner were trading 7.6% lower at 167.35 pence each on Friday morning in London.
International Consolidated Airlines said revenue for the three months to June 30 was GBP703 million, plunging 89% year-on-year from GBP6.73 billion. Pretax loss for the quarter was GBP2.32 billion, swinging from a profit of GBP921 million.
For the six months to June, pretax loss was EUR4.21 billion, swinging from a profit of GBP1.01 billion the year prior. Revenue in the half-year dropped to EUR5.29 billion from GBP12.03 billion.
Passenger capacity operated in the second quarter was down 95% on 2019 and for the first half, down 56%.
The company booked an exceptional charge of EUR2.14 billion during the first half, related to "de-recognition of fuel", foreign currency hedges and a fleet impairment.
Looking ahead, Chief Executive Willie Walsh said: "We continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels. Each airline has taken actions to adjust their business and reduce their cost base to reflect forecast demand in their markets not just to get through this crisis but to ensure they remain competitive in a structurally changed industry."
No profit guidance was given for the full year due to Covid-19 related uncertainty.
IAG also confirmed plans to raise EUR2.75 billion from a pre-emptive share subscription. The cash will be used to strengthen its balance sheet, reduce leverage and provide additional liquidity to help it withstand a more prolonged downturn in air travel
Largest shareholder Qatar Airways, with a 25% stake, has backed IAG's plans and has proposed two directors to join IAG'S board as non-executive directors.
Separately, IAG said Chair Antonio Vazquez - who reached nine years in office last January - will retire early January 2021. He will be succeeded by Independent Director Javier Ferran.
"I sincerely appreciate Antonio's work in the creation and development of the group. The management team, and I have always counted on his commitment, dedication and support. Antonio has shown great leadership in his management of the board and has succeeded in getting the best out of everyone in good times and bad. Together we have created a group that has become a benchmark in the aviation industry. I thank Antonio for his friendship, his dedication during all these years, and for his work and defence of the company's interests and that of its shareholders," said Walsh.
By Ife Taiwo; ifetaiwo@alliancenews.com
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