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BA-owner IAG cautious on recovery, sees summer capacity rising to 45%

Stock Markets30 minutes ago (Jul 30, 2021 02:40AM ET)

(C) Reuters. FILE PHOTO: A British Airways plane taxis past tail fins of parked aircraft near Terminal 5 at Heathrow Airport in London, Britain, March 14, 2020. REUTERS/Simon Dawson

LONDON (Reuters) – IAG (LON:ICAG) said summer capacity would rise to 45% of pre-pandemic levels from 22% in the previous quarter, in the latest sign that a travel recovery is underway, although the British Airways-owner said significant uncertainty remained.

IAG said on Friday that it was focused on ensuring it could quickly react to changes in restrictions and take advantage of demand where it arose, but declined to give a profit forecast for the year due to COVID-19.

Britain will lift more restrictions on arrivals from abroad on Monday, allowing IAG’s usually most profitable airline BA to catch up with Spanish units Iberia and Vueling which have already benefitted from an earlier loosening of travel rules in Europe.

But many barriers to travel remain in place.

The United States is closed to visitors from Britain, a big blow to BA’s transatlantic business, while expensive COVID-19 testing measures are still in place in some countries, dampening demand.

IAG’s plan to fly 45% of 2019 capacity in its July-September quarter, put it behind competitors.

Air France-KLM said on Friday it expected third quarter capacity at 60-70% of 2019 levels, while easyJet (LON:EZJ) plans to fly 60% of its pre-pandemic capacity.

Ryanair earlier this week raised its forecast for full-year traffic on strong summer bookings.

Low levels of flying due to ongoing pandemic restrictions meant that for the three months to the end of June, IAG reported an underlying operating loss of 1.045 billion euros ($1.24 billion), in line with a consensus forecast for a 1.036 billion euros loss.

IAG said it had liquidity of 10.2 billion euros and added that it continued to preserve cash by reducing its cost base.

($1 = 0.8418 euros)

BA-owner IAG cautious on recovery, sees summer capacity rising to 45%

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