British Airways parent IAG will reduce capacity by “at least 75%” compared with the same period last year due to the “rapid spread” of the Covid-19 coronavirus.
The group said the spread of the infection and subsequent state travel restrictions and advisories was having a “significant and increasingly negative” on demand across “almost all routes” operated by IAG group airlines.
IAG on Monday (16 March) outlined a wide range of cost-saving measures, including grounding surplus aircraft, freezing recruitment and encouraging voluntary leave.
In a trading update, the group said its finances were healthy, stating its total liquidity amounted to €9.3 billion. However, citing the ongoing uncertainty and potential impact of Covid-19, it was no longer possible to give any accurate profit guidance for the full year.
“We have seen a substantial decline in bookings across our airlines and global network over the past few weeks, and we expect demand to remain weak until well into the summer,” said IAG chief executive Willie Walsh.
“We are therefore making significant reductions to our flying schedules. We will continue to monitor demand levels, and we have the flexibility to make further cuts if necessary.
“We are also taking actions to reduce operating expenses and improve cash flow at each of our airlines. IAG is resilient with a strong balance sheet and substantial cash liquidity.”