IAG Group loses 7 billion euros due to flight paralysis in 2020

The holding company of Iberia, British Airways, Vueling and Aer Lingus, IAG Group, has recorded one of the largest accumulated losses by a company during 2020 as a result of the coronavirus. IAG has lost 6.92 billion euros compared to the net profit of 1.7 billion a year earlier.

The impact of the pandemic, which led to travel restrictions that are still in place today, have been the cause of these numbers to be in the red, in one of the listed companies most affected by this crisis.

The company has recognized certain things in these figures that they have been affected by, such as a forecasted charge of 3 billion euros related to the suspension of the accounting of fuel charges (the formula they use to buy them in advance from large producers), as well as the management of foreign exchange in the countries where it operates, the depreciation of the value of their fleet, which is practically paralyzed, and staff restructuring expenses. Despite this situation, IAG shares are up more than 2% on the Spanish Stock Market at this time.

The total income of the holding company was 7.8 billion euros, which represents a decrease of 69.4% compared to 2019. The passenger transport capacity in the fourth quarter was 26.6% of the total in 2019, and for the year was 33.5% of the 2019 total, and continues to be affected by the coronavirus pandemic, as well as by government restrictions and quarantine measures.

Current passenger carrying capacity plans for the first quarter of this year are around 20% of 2019 capacity, but remain uncertain and subject to review. “The aviation industry supports governments' willingness to place public health as a top priority. A clear roadmap will be needed regarding the lifting of current restrictions globally so that people can fly again when the time is right,” said the CEO of IAG Luis Gallego.

“We know that there is a continued demand for travel and that people want to fly. Vaccinations are progressing well and global infections are heading in the right direction. We ask for common international standards regarding testing and the implementation of digital health cards to reopen our skies safely,” he added.