IAG, the British Airways owner, has reported a 1.3 billion Euro (1.2 billion pounds) Q3 2021 loss on October 22. The news comes as COVID-19 restrictions depress travel further as the second wave of the pandemic threatens to put many economies on another major lockdown. Depressed travel has forced IAG to further cut flying schedules for the rest of 2021.
The loss was quite bigger than the 920 million euros predicted by analysts which represents the real scale of the challenge faced by Luis Gallego, IAG’s new boss who took over in September.
As a second wave of the pandemic spreads across Europe, airlines are now facing a bleak winter, and IAG joins Ryanair, Lufthansa, and EasyJet in cutting back the already sporadic schedules.
IAG said on October 22 that for the fourth quarter, it would fly only 30% of the capacity it flew a year ago which is lower than the previous guidance of 40%. With fewer flights, the group said that it would not reach any breakeven in terms of net cash flow from operations in Q4 2021. However, it said that liquidity was strong.
The company has managed to raise 2.74 billion Euros from shareholders and got the funds earlier this month. With that funding, it managed to increase its total liquidity to 9.3 billion Euros.
IAG added that Q3 revenue dropped 83% to reach 1.2 billion euros in results that were released a week earlier than expected, stating that it was operating in an environment dominated by ‘high uncertainty.’
Lufthansa, the German rival to IAG, also released its results early and reported a 1.26 billion euro loss on October 20. IAG has said that it will publish more detailed results on October 30.