BA owner warns of €3bn loss as it pins hopes on transatlantic travel revival

British Airways’ owner, IAG, is pinning its hopes on the revival of transatlantic travel next week as it warned that pandemic disruption would drive a loss of €3bn for 2021.

IAG’s chief executive, Luis Gallego, said the reopening of the US border to foreign nationals from Monday was a “pivotal moment for our industry”.

The group, whose airlines also include Iberia and Aer Lingus, reported a €485m (£416m) loss for its third quarter, the key summer period between July and September. It was lower than expected and less than the €1.3bn loss in the same period last year. An annual loss of €3bn would be lower than the €4.3bn loss reported in 2020.

Passenger capacity in the third quarter hit 43% of levels achieved before the pandemic in 2019 – almost double the 21.9% recorded in the previous quarter – with the final three months of the year forecast to hit 60% of pre-pandemic capacity.

“There is a significant recovery under way, we continue to capitalise on surges in bookings when travel restrictions are lifted,” Gallego said. “All our airlines have shown improvements.”

In October, the government gave the industry a boost by moving to cut the number of countries on the “red list”, which has the toughest restrictions, 含む 10 days of quarantine, から 54 to seven.

Coronavirus testing rules were also simplified with PCR tests, which cost about £75 each on average, for international travellers scrapped last month.

Gallego said that “premium leisure” travel has proved to be a strong theme among travellers aiming to finally enjoy a holiday abroad, while there were also signs of recovery in business trips.

“Long-haul traffic has been a significant driver of revenue, with bookings recovering faster than short haul as we head into the winter," 彼は言った. “Premium leisure is performing strongly at both Iberia and British Airways and there are early signs of a recovery in business travel.”

IAG reported €2.7bn in passenger and cargo revenue in the third quarter, almost triple the €750m in the same period last year.

The company said that operating cashflow in the third quarter was positive for the first time since the start of the pandemic and is targeting a return to profitability in 2022.

Shares in IAG, which expects capacity levels overall this year to be 37% の 2019 レベル, fell 1.5% on Friday morning.

“British Airways’ owner IAG is still stuck on the runway based on its latest trading update as it looks to follow a flight path to recovery,” said Russ Mould, an investment director at AJ Bell. “It did report a sharp narrowing in third-quarter losses but IAG is not yet able to point to a return to profitability in 2022 with any degree of confidence.”