IAG loses £1.2bn in three months and cuts planned operations

British Airways’ parent company IAG has reported a 1.3 billion euro (£1.2 billion) loss during the past three months and downgraded its planned operations for the rest of the year.

The group expects its flight capacity from October to December to be no more than 30% of what it was over the same period in 2019.

This is down from previous guidance.

IAG said the reduction is due to recent bookings being lower than expected due to “additional measures implemented by many European governments in response to a second wave of Covid-19 infections”.

These include an increase in local lockdowns and the extension of quarantine requirements for travellers visiting a rising number of countries.

Meanwhile, initiatives to reduce quarantine periods and boost customer confidence to book and travel – such as pre-departure testing and air corridors – have “not been adopted by governments as quickly as anticipated”, IAG said.

As a result, the group “no longer expects to reach breakeven in terms of net cash flows from operating activities” between October and December.

Announcing its preliminary financial results for July-September, total revenue declined by 83% year on year to 1.2 billion euro (£1.1 billion).

The loss before exceptional items of 1.3 billion euro (£1.2 billion) between July and September is compared with a 1.4 billion euro (£1.3 billion) profit during the same period last year.

Flight capacity was down 78.6% over the quarter, with passenger demand decreasing by 88.0%.

The average number of seats filled on flights was 48.9%, down 38.8 percentage points.