British Airways owner IAG suffers biggest loss in its history
International Airlines Group (IAG) (IAG), the owner of British Airways, plunged to the biggest loss in its history, as a result of continued negative impacts to passenger demand due to COVID-19 crisis.
On February 26, 2021, IAG reported a net loss of €6.9 billion ($8.4 billion) after tax in 2020 compared to a net profit of €1.7 billion ($2.1 billion) after tax in 2019. The airline’s financial results also disclosed the operating loss of €7.4 billion ($9 billion) in 2020 compared with a profit of €2.6 billion ($3.2 billion) in 2019.
“Our results reflect the serious impact that COVID-19 has had on our business. We have taken effective action to preserve cash, boost liquidity and reduce our cost base. Despite this crisis, our liquidity remains strong,” Luis Gallego, the Chief Executive of IAG Group, said.
Following the financial statement, IAG’s passenger capacity, which was crucial for the group’s financial performance, slumped by 34%. Looking to the future, IAG indicated that passenger capacity plans for the first quarter of 2021 would be only around 20% of the group’s pre-pandemic capacity.
However, the cargo business tipped the balance and compensated for decreased passenger demand. The group disclosed that it operated 4,003 cargo-only flights and increased its cargo revenue by 17% compared to 2019.
“IAG Cargo’s turnover increased by almost €200 million to €1.3 billion. Cargo helped to make long haul passenger flights viable,” Gallego added.
Furthermore, the airline group said that due to the uncertainty over the impact of the COVID-19 crisis, it would not provide profit guidance for 2021.
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