British Airways estimated a loss of €7.4 billion due to Covid pandemic.
The airline empire, which also operates Iberia, Vueling and Aer Lingus, reported a post-tax loss of EUR 7.4 billion in 2020 on Friday, February 26, the worst since the firm was founded 10 years ago.
“Our findings show the severe effect Covid-19 has had on our business,” said Luis Gallego, IAG’s chief executive. In order to best balance consumer demand, the company continues to reduce its cost base and increase the proportion of contingent costs. To ensure that we emerge in a better competitive position, we’re transforming our business.
Passenger sales from IAG officially fell 75% from EUR 22.4 billion to EUR 5.5 billion last year, but it claimed that during the pandemic, Its freight industry “Help to make long-haul passenger flights possible.” Cargo sales rose by almost EUR 200 million to EUR 1.3 billion, and IAG has handled over 4,000 cargo-only flights during the year.
The airline group said that it will not have earnings forecasts for this year because of the uncertainties about the effect of the pandemic on its sector and called for an international initiative to “reopen the sky.”
“Gallego said: “In putting public health at the forefront of the agenda, the aviation industry stands with governments. A straightforward plan for unwinding existing constraints when the time is right would be important to get people to fly again. We know the pent-up appetite for travel is there, and people want to ride. Vaccinations are moving well and the right direction is being followed by global diseases. To reopen our airspace safely, we are calling for international common testing requirements and the implementation of wireless health passes.
Last year, IAG burnt almost EUR 80 million a week with cash of EUR 4.1bn. Nevertheless, the firm reported that its liquidity stood at EUR 10.3 billion, greater than at the height of the pandemic, and that its stock cap had halved to £ 9.6 billion.
“These IAG findings also demonstrate just how painful it has been for the airline industry in the last year,” said Jack Winchester, a Third Bridge analyst.