According to the IAG, passenger capacity fell to 78.6% in the third quarter due to COVID-19 restrictions.
The airline holding company’s cash operating costs decreased by 54% in the third quarter.
IAG will not be able to reach the cash flow break-even point in the fourth quarter.
In an announcement on Friday, International Consolidated Airlines Group (LON: IAG) said its passenger capacity in the third quarter fell to 78.6% 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 sales manager of IAG Cargo earlier this week.
IAG opened on Friday with a loss of about 1.5% on the stock market, but made up for the entire intraday loss in the later hours. Including the price action, the company’s shares are now trading at 93 pence from the previous year’s low of 68 pence per share in mid-May. IAG started the year at 256 pence per share.
IAG’s cash operating costs were reduced by 54% in the third quarter.
IAG also warned that it would not be able to break even on cash flow in the fourth quarter of the fiscal year. However, the owner of British Airways, Aer Lingus and Iberia, stressed on Friday that its cost cutting measures had resulted in a 54% reduction in cash operating costs in the third quarter.
The IAG also said that agreements had been reached with the majority of British Airways’ employee groups. It valued its extraordinary costs at £556.88 million for the quarter ended September 30, including £247.80 million of extraordinary costs due to the 10,000 job cuts at Aer Lingus and BA combined.
In early October, the airline holding company reported an adjusted operating loss of £1.17 billion for the third quarter, compared with a profit of £1.26 billion a year earlier. In terms of revenue, the London-based company posted a profit of £1.08 billion, compared with a significantly higher profit of £6.58 billion in the same quarter last year.
The comments of CEO Luis Gallego on Friday
CEO Luis Gallego of IAG commented on Friday’s financial update and said
“These results show the negative impact of COVID-19 on our business, but they are exacerbated by ever-changing government restrictions. This creates uncertainty for customers and makes it difficult to plan our business effectively”.
The International Consolidated Airlines Group appointed Sean Doyle as British Airways’ new Chief Executive in the second week of October.
IAG’s stock market performance was slightly positive last year with an annual profit of almost 5%. At the time of writing, it has a market capitalization of 4.61 billion pounds sterling.