IAG sees FY loss of €3bn, pins hopes on US reopening

British Airways owner IAG narrowed third quarter losses as more people started to travel with the lifting of Covid restrictions but warned of a €3bn annual loss.

The company on Friday posted an operating loss of €452m during the key summer quarter to September 30 compared with a loss of €1.92bn last year when passenger travel came to a virtual standstill.

IAG added that it expects a €3bn annual operating loss before exceptional at current fuel prices and exchange rates. Fourth-quarter is expected to be approximately 60% of 2019, resulting in 2021 capacity of 37% of the 2019 level.

"The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry. British Airways is serving more US destinations than any transatlantic carrier and we're delighted that we can get our customers flying again,” said chief executive Luis Gallego.

"Longhaul traffic has been a significant driver of revenue, with bookings recovering faster than shorthaul as we head into the winter. Premium leisure is performing strongly at both Iberia and British Airways and there are early signs of a recovery in business travel.”

IAG said it planned to increase flight schedules across its airlines to 60% of normal levels this quarter, up from the 40% they flew over the summer.

The company, which did not receive any bailouts during the pandemic crisis, turned to the debt and equity markets to bolster its balance sheet and by the end of the quarter had €10.6bn of liquidity. It reported €12.4bn in net debt by the end of September, up from €7.5bn at the end of 2019.