IAG says passenger capacity slid to 78.6% in Q3 due to COVID-19 restrictions
- IAG says passenger capacity slid to 78.6% in Q3 due to COVID-19 restrictions.
- The airline holding company's cash operating costs reduced by 54% in Q3.
- IAG will not be able to hit breakeven in terms of cash flow in the fourth quarter.
In an announcement on Friday, International Consolidated Airlines Group (LON: IAG) said its passenger capacity slid to 78.6% in the fiscal third quarter due to the Coronavirus pandemic that has so far infected 45 million people worldwide and caused over 1.18 million deaths. IAG promoted Darren Peek to the new head of sales at IAG Cargo earlier this week.
IAG opened about 1.5% down in the stock market on Friday but recovered the entire intraday loss in the later hours. Including the price action, shares of the company are now exchanging hands at 93 pence versus its year to date low of 68 pence per share in mid-May. IAG had started the year at a per-share price of 256 pence.
IAG’s cash operating costs reduced by 54% in Q3
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IAG also warned that it will not be able to hit breakeven in terms of cash flow in the fiscal fourth quarter. The owner of British Airways, Aer Lingus, and Iberia, however, highlighted on Friday that its cost-cut measures resulted in a 54% decline in cash operating costs in the third quarter.
IAG also said that agreements with the majority of British Airways employee groups had been reached. It valued its exceptional charges in the quarter that concluded on 30th September at £556.88 million, including £247.80 million of an exceptional cost attributed to slashing its workforce by 10 thousand jobs at Aer Lingus and BA combined.
Earlier in October, the airline holding company reported £1.17 billion of adjusted operating loss in the third quarter versus the year-ago figure of £1.26 billion of profit. In terms of revenue, the London-headquartered company posted £1.08 billion as compared to a sharply higher £6.58 billion in the same quarter last year.
CEO Luis Gallego’s comments on Friday
CEO Luis Gallego of IAG commented on the financial update on Friday and said:
“These results demonstrate the negative impact of COVID-19 on our business, but they’re exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business effectively.”
International Consolidated Airlines Group named Sean Doyle as the new Chief Executive of British Airways in the second week of October.
IAG performed slightly upbeat in the stock market last year with an annual gain of close to 5%. At the time of writing, it has a market capitalisation of £4.61 billion.