British Airways owner IAG suffers a record loss of € 7.4 billion

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British Airways owner International Consolidated Airlines IAG sank + 4.35% on Friday in the biggest loss in its history as it called for the introduction of digital health passes for passengers to restart international travel. The airline group reported a full-year operating loss of € 7.4 billion ($ 9 billion), including exceptional items related to fuel and currency hedges, early fleet retirement and restructuring costs.

That compared to a gain of 2.6 billion euros in 2019, highlighting the scale of the challenges facing the airline industry as new strains of the coronavirus causing COVID-19 continue to close borders and land planes. IAG’s operating loss before one-off items was € 4.4 billion, slightly better than analysts’ expectations. The group’s total revenue fell 69% during the year, to € 7.8 billion, as IAG IAG, + 2.91%, which also owns Iberia, Aer Lingus and Vueling, flew just a third of its schedule normal in 2020. 2021 will be 20% of 2019 levels, down from 27% the previous quarter, the company said. Luis Gallego, CEO of IAG who replaced Willie Walsh in September, said 2020 had been a crisis year for the airline industry, but vaccines were progressing well and infection rates “are heading in the right direction.” Shares in IAG, which have fallen 50% over the past year, compared with a 6% drop for the broader FTSE 100, rose 3.92% in early London trading on Friday. UK airline stocks received a boost earlier this week after Prime Minister Boris Johnson announced his roadmap to lift England out of its third lockdown. Read: Airlines and travel stocks rise as UK sets up lockdown exit plans EasyJet EZJ, + 3.17%, Ryanair RYA, + 0.82% and TUI TUI1, + 1.16%, all reported an increase in bookings to destinations such as Spain and Greece, after Johnson said international travel could potentially resume as of May 17, subject to review and if there is no resurgence of the coronavirus. But it‘s not yet clear whether that will include IAG’s long-haul routes. “Getting people to travel again will require a clear roadmap to undo current restrictions when the time is right,” said IAG’s Gallego, who called for common international testing standards and the introduction of digital health passes “to reopen our skies safely. ” Read: Europe moves towards COVID-19 vaccine passports, but not all countries are on board Passenger revenue fell 75.5% from € 22.5 billion to € 5.5 billion. Given the uncertainty and duration of the coronavirus crisis, IAG IAG, + 5.26% was unable to provide an earnings guidance for 2021, the company said. “IAG’s biggest problem is not picking up passengers at an economic reopening. You will be able to benefit from the return of domestic passengers like your smaller peers easyJet and Ryanair, “said Michael Hewson, CMC Markets UK Chief Market Analyst.” Your main problem will be getting the same levels of long-haul business travel you had before the pandemic. This is where most of the big operators make money, and this is where normal service may take a little longer to return to the same levels they were in 2019. “Read: COVID-19 hotel quarantine of high-risk countries to begin in the UK as of February 15 The airline group has taken steps to strengthen its liquidity, which is currently € 10.3 billion, following a capital increase of € 2.7 billion and £ 2 thousand million of UK export finance loan commitments. “This is higher than at the start of the pandemic,” Gallego said, adding that the group continues to reduce its cost base to ensure it emerges “in a position stronger competitive. ”Net debt stood at 9.8 billion euros at the end of 2020, almost 30% more than the previous year.