British Airways' parent company IAG reports Covid-19 loss of £5.1billion

30 October 2020, 08:38 | Updated: 30 October 2020, 08:49

IAG has reported a loss after tax and exceptional items of 5.6 billion euros (£5.1 billion)
IAG has reported a loss after tax and exceptional items of 5.6 billion euros (£5.1 billion). Picture: PA

The parent company of British Airways has reported a loss of £5.1 billion in the first nine months of the year.

IAG swung to a pre-tax loss of 6.2 billion euros (£5.6 billion) for the nine months to the end of September, compared with a 2.3 billion euros (£2.1 billion) pre-tax profit during the same period a year ago.

One-off costs included a 1.6 billion euros (£1.45 billion) charge relating to fuel pricing bets - or hedging - since so few flights were operated, and 275 million euros (£249 million) relating to the 10,000 redundancies planned.

IAG chief executive Luis Gallego said: "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."

He went on: "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."

Mr Gallego said quarantines are "not the solution" and the industry "cannot wait until the vaccine to have people flying".

Asked about plans by authorities in the UK and US to trial a travel corridor between London and New York which would reduce the quarantine requirement, Mr Gallego said: "We are trying to put pressure to open some corridors. New York for us is a key destination.

"We hope we can have a solution soon."

IAG expects it will take until at least 2023 for passenger demand to recover to 2019 levels.

The group said it has completed a 2.7 billion euro (£2.4 billion) capital increase which "makes IAG better placed to take advantage of a recovery in air travel demand".

Cyprus and Lithuania are the latest countries to lose their exemption from the UK's quarantine requirement.

Travellers arriving in the UK from those destinations after 4am on Sunday must self-isolate for 14 days due to a rise in coronavirus cases.

Earlier this month, Transport Secretary Grant Shapps launched a taskforce to develop methods of reducing the 14-day self-isolation period for people arriving in the UK from non-exempt locations.

British Airways has come under fire in recent months for its handling of up to 12,000 job cuts.

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The company was accused of threatening a "fire and rehire" scheme whereby remaining employees would be rehired on downgraded terms and conditions if an agreement could not be reached.

Trade union Unite claimed it has only carried out a "partial U-turn" on the issue, with "still too many BA workers facing threats to their wages and working life".

The pandemic has led to a collapse in demand for air travel, with passenger numbers not expected to return to 2019 levels until 2024.