British Airways parent company, International Airlines Group (IAG), has reported a €6bn loss in its Quarter 3 (Q3) financial results.
The group, which also owns Aer Lingus, said Q3 had seen it run an operating loss of €5.9bn compared to a €2.5bn profit in the same period last year.
IAG says that the main reason for the loss is the drop in travel demand and restrictions caused by the global coronavirus pandemic and said it has been operating a passenger capacity that is 78.6% lower than than last year.
The group says that fuel hedging along with restructuring at British Airways and Aer Lingus are other reasons for the losses.
The figures also revealed that 10,000 redundancies at British Airways and Aer Lingus had cost the group around £250m.
Luis Gallego, IAG’s new Chief Executive Officer, said: “In quarter 3 we’re reporting an operating loss of €1,300 million before exceptional items compared to an operating profit of €1,425 million last year. The total operating loss was €1,918 million, including exceptional items relating to fuel hedges plus restructuring costs at British Airways and Aer Lingus.
“These results demonstrate the negative impact of COVID 19 on our business but they’re exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business effectively.
“We are calling on governments to adopt pre-departure testing using reliable and affordable tests with the option of post-flight testing to release people from quarantine where they are arriving from countries with high infection rates. This would open routes, stimulate economies and get people travelling with confidence. When we open routes, there is pent up demand
for travel. However, we continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels.
“The Group has made significant progress on restructuring and we continue to reduce our cost base and increase the proportion of our variable costs.
“We have also successfully completed a €2.74 billion capital increase in the quarter. It strengthens our financial and strategic position and makes IAG better placed to take advantage of a recovery in air travel demand.”
IAG says that as the global pandemic is ongoing it will not be providing a profit guidance for 2020.
