The airline giant, which also owns Iberia, Aer Lingus and Vueling, said it was currently only planning to fly 45% of the capacity from July to September that it operated in the same quarter in 2019. But these plans “remain uncertain and subject to ongoing review”.
Luis Gallego, IAG’s chief executive, said: “In the short term, our focus is on ensuring our operational readiness, so we have the flexibility to capitalise on an environment where there’s evidence of widespread pent-up demand when travel restrictions are lifted.
“We know that recovery will be uneven, but we’re ready to take advantage of a surge in air travel demand in line with increasing vaccination rates.”
Gallego also welcomed the UK government’s move this week to allow fully vaccinated travellers from the EU and US to enter the UK without having to quarantine on arrival.
“We see this as an important first step in fully reopening the transatlantic travel corridor,” he added.
Spanish airlines Iberia and Vueling were IAG’s best performers during the first half of the year due to fewer travel restrictions affecting Spain’s domestic market and routes to Latin America.
While British Airways’ increase in capacity was “severely limited” by the low number of countries on the UK’s green list, as well as restrictions placed on British travellers in destinations due to the spread of the delta variant.
Aer Lingus’ capacity was also restricted by the Irish government’s measures to control the spread of the coronavirus, with passenger load factors averaging only 20%.
For the first half of 2021, IAG recorded an operating loss of €2 billion – down from a €4 billion loss during the first six months of 2020 – as operational costs dropped by 54.5% year-on-year, including an 81% reduction in fuel charges and a 32% cut in employee costs.
But the group’s passenger revenue fell to just €1.14 billion, which was a 72% drop from the same period last year as capacity was down by 52.5% year-on-year.
“All our airlines continue to take significant actions to preserve their strength through the current pandemic and to position them for recovery,” stressed Gallego.
“We continue to build resilience by preserving cash, boosting liquidity and reducing our cost base.”
He added that IAG had liquidity of €10.2 billion at the end of June including cash of €7.7 billion, while there had also been a “significant improvement in operating cash flow compared to previous quarters”.
IAG said it could not provide any guidance on profit for 2021 due to the “uncertainty over the timing of the lifting of government travel restrictions and the continued impact and duration of Covid-19”.
