IAG shareholders vote in favour of raising £2.51 billion of new equity
- IAG shareholders vote in favour of raising £2.51 billion of new equity.
- Luis Gallego takes over the role of the company's new CEO.
- IAG reported £1.25 billion of operating loss in Q2 due to COVID-19.
Iberia’s Luis Gallego took over the role of the new chief executive officer of the parent organisation, International Airlines Group (LON: IAG), on Tuesday, that effectively marked an end to CEO Willie Walsh’s tenure at the airline holding company. IAG’s shareholders also voted in favour of the company’s plans of raising new equity worth £2.51 billion on Tuesday.
IAG’s stock didn’t respond aggressively to the news. Shares of the company remained flat in premarket trading on Wednesday. IAG lost about 3.5% on market open but recovered the entire loss later in the day.
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Walsh was originally scheduled to step down in March
Walsh succeeded in merging Spain’s Iberia and British Airways to found IAG in 2011. In an announcement in July, British Airways revealed to have retired its entire fleet of Boeing 747 jetliners.
He was originally scheduled to step down in March. But as COVID-19 weighed on the global airline industry, Walsh decided to keep the helm to navigate the company out of the economic crisis. Walsh said:
“It is the worst crisis we have ever faced, far worse than both 9/11 and the financial crash in 2008. We are having to re-calibrate everything we do as we anticipate that it will take until at least 2023 or 2024 for passenger demand to recover to 2019 levels.”
IAG reported £1.25 billion of operating loss in Q2
The impact of COVID-19 on IAG’s financial performance was evident in its quarterly report published in July that highlighted the company to have swung to £1.25 billion of operating loss in the fiscal second quarter as compared to the year-ago figure of £875 million of profit.
Walsh said in the virtual annual general meeting on Tuesday that the planned rights issue will help further boost the company’s liquidity amidst COVID-19 uncertainty. The plan secured over 99% of votes, including IAG’s largest shareholder, Qatar Airways.
Walsh also acknowledged Gallego’s performance at Iberia and expressed confidence that he was the right man to lead IAG from here on.
IAG’s performance in the stock market was slightly upbeat last year with an annual gain of about 6%. At the time of writing, the London-based airline holding company is valued at £4.03 billion.