The International Airlines Group (IAG), which owns Iberia and British Airways (BA) along with other companies, announced its results for the third quarter of 2020 and the capacity outlook for the fourth quarter this Thursday (22).
Consolidated sales fell sharply, while the decline in business resulted in a loss of 1.3 billion euros, compared to a profit of 1.4 billion euros in the previous year. The passenger capacity, expressed in available seat kilometers, fell by 78.6 percent in the quarter. Passenger traffic, measured in terms of paid passenger-kilometers, fell by 88%. The seat occupancy factor decreased by 38.8 points to 48.9%.
The results are appalling for the size of the group, which includes some of the most important airlines in Europe, but also for their prospects for the future.
The pessimism is due to the additional measures many European governments are taking in response to a second wave of COVID-19 infections, including an increase in local blockades and an expansion of quarantine requirements for travelers from an increasing number of countries. At the same time, initiatives aimed at replacing quarantine times and building customer confidence in booking and travel, such as: B. Pre-departure tests not approved by governments as planned.
30% in the fourth quarter
In response to this high level of uncertainty, the IAG is now planning that capacity in the fourth quarter of 2020 will not exceed 30% compared to 2019. As a result, the group no longer expects to break even in terms of net operating cash flow during the reporting period 4Q2020 and which should be back at a heavy loss.
The detailed results for the third quarter will be released as planned on October 30th, along with a presentation and conference call for analysts and investors.