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* First-quarter loss 1.14 bln euros vs 1.17 bln consensus
* Weekly cash burn lower than expected at 175 mln euros
* Sees second-quarter capacity at 25% of pre-pandemic level
* Shares up 0.7%
(Adds CEO, CFO comments)
By Sarah Young
LONDON, May 7 (Reuters) - British Airways owner IAG
is confident travel will recover from July onwards after
forecasting only a minimal increase in its capacity to 25% for
the April to June quarter.
IAG, which also owns Iberia and Vueling in Spain and Aer
Lingus in Ireland, declined to forecast how much it would fly
from July but said the recovery would be properly underway by
then after more than a year of pandemic restrictions.
"We consider in the second half that we are going to be
flying and we are prepared for that," IAG Chief Executive Luis
Gallego told reporters on Friday after the company posted a loss
of 1.14 billion euros ($1.4 billion) in the first quarter.
Before July, however, Gallego said government action was
needed on some issues, such as opening travel corridors between
countries with high vaccination rates, including the United
Kingdom and the United States.
The rise to 25% of pre-pandemic capacity puts IAG's plans
behind those of rival airlines, and is only a marginal increase
from the 19.6% it flew in the first three months of 2021.
Britain, which along with Spain is one of IAG's main
markets, is set to publish later on Friday its "green list" of
low risk places where people can travel without needing to
quarantine on their return.
Gallego said IAG was expecting only a small list of
countries initially with more being added from June onwards.
"Part of the reason we're not giving guidance (for
third-quarter capacity) is simply because we don't know what's
on the green list yet," Chief Financial Officer Steve Gunning
said.
Air France-KLM expects to operate 50% of its
pre-pandemic flight capacity in the second quarter, picking up
to 55% to 65% in July-September. Lufthansa expects to fly at
about 40% of its pre-pandemic capacity for 2021 as a whole.
IAG's first-quarter operating loss before exceptional items
of 1.14 billion euros was slightly better than the 1.17 billion
euro loss forecast by analysts.
Shares in the company, which have risen 30% since the
beginning of the year, traded up 0.7%.
"The company delivered a solid set of results and is
pointing to the start of the recovery into the summer," Goodbody
analyst Mark Simpson said.
Given the ongoing uncertainty over COVID-19, IAG said it
could not provide a profit outlook for 2021.
($1 = 0.8282 euros)
(Reporting by Sarah Young; Editing by Paul Sandle, Michael
Holden and David Clarke)
