IAG results

The 2020 full year results for International Airlines Group (IAG), published on Friday (26 February), met expectations.  That is to say they were poor. IAG includes British Airways, Iberia, Aer Lingus and Vueling.

Luis Gallego, IAG’s chief executive officer, summed up the situation: “In 2020, we’re reporting an operating loss of €4,365m before exceptional items compared to an operating profit of €3,285m in 2019. Total operating losses including exceptional items relating to fuel and currency hedges, early fleet retirement plus restructuring costs came to €7,426m.

“Our results reflect the serious impact that Covid-19 has had on our business. We have taken effective action to preserve cash, boost liquidity and reduce our cost base. Despite this crisis, our liquidity remains strong. At 31 December, the Group’s liquidity was €10.3bn including a successful €2.7bn capital increase and £2bn loan commitment from UKEF [UK Export Finance]. This is higher than at the start of the pandemic.

“In 2020, our capacity decreased by 66.5% while our non-fuel costs went down 37.1% thanks to the extraordinary effort across our business. The Group continues to reduce its cost base and increase the proportion of variable costs to better match market demand. We’re transforming our business to ensure we emerge in a stronger competitive position. “IAG Cargo’s turnover increased by almost €200m to €1.3bn. Cargo helped to make long-haul passenger flights viable. In addition, we operated 4,003 cargo-only flights in the year.

Now London-based Mr Gallego said he could not give any predictions for 2021.

Also see British Airways financing in this week's BTN.

www.iairgroup.com

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