In an update to the stock market on Thursday, International Airlines Group (IAG), the parent company of British Airways and Spanish flag carrier Iberia, says flight capacity for the fourth quarter between October and December will now be “no more than 30 per cent” of pre-pandemic levels.
The European airline group, which also owns Aer Lingus and low-cost carrier Vueling, had originally hoped to be operating at 40 per cent capacity but has slashed schedules in response to an “increase in local lockdowns and extension of quarantine requirements to travellers from an increasing number of countries”.
Stephen Gunning, IAG’s chief financial officer complained that “initiatives designed to replace quarantine periods and increase customer confidence to book and travel, such as pre-departure testing and air corridor arrangements, have not been adopted by governments as quickly as anticipated.”
Gunning, however, reassured the markets that liquidity in the business remained strong with IAG sitting on a cash pile of €5.0 billion and a further €1.6 billion of undrawn and committed general and aircraft facilities.
The airline group has slashed costs over the last six months to weather the COVID-19 storm and has axed thousands of jobs at British Airways and Aer Lingus.
On Monday, Sean Doyle, the new chief executive of British Airways who was parachuted in from Aer Lingus after his predecessor Alex Cruz made a surprise announcement of his immediate resignation, complained about ongoing quarantine requirements that were decimating the aviation industry.
“We believe the best way to reassure people is to introduce a reliable and affordable test before flying,” Doyle said in a pre-recorded address to the Airlines 2050 conference. Doyle highlighted a study from the International Air Transport Association (IATA) which concluded that there had been as few as 44 cases of confirmed COVID-19 cases linked to flights since the start of 2020.
In the same period, over 1.2 billion have travelled by air.
The expert whose research was used for the study has, though, distanced himself from the claims, saying it was based on “flawed math” and that an absence of testing made the results unreliable.
IAG would like to see governments approve a universally accepted rapid pre-departure COVID-19 that would reassure travellers and unlock quarantine restrictions. There is hope that bilateral agreement can be reached between the United States and Europe to open up quarantine-free air corridors although the two sides are yet to reach an agreement.
Earlier this month, Europe’s largest low-cost carrier Ryanair said it would slash capacity to just 40 per cent of pre-COVID levels. The airline had hoped to operate at 60 per cent capacity but increased flight restrictions have made that plan all but impossible.
