IAG, the group that owns Iberia, British Airways or Vueling, lost 3,800 in the first half of the year (until June) , compared to the profit of 806 million the previous year, due to the drop in demand derived from the Covid crisis, according to the results sent today to the National Securities Market Commission (CNMV).

The group has proposed a capital increase of up to 2,750 million euros to deal with this crisis. This operation, which has the backing of Qatar, the main shareholder, and which will have to be approved during the General Meeting to be held in September, "will improve the group's ability to adapt, its balance sheet and its liquidity position" , in the words of Willie Walsh, CEO of the group.

"We are very pleased that our largest shareholder, Qatar Airways, has already committed to supporting the proposed capital increase. As a result, IAG will be in a better position to continue executing its strategic objectives and to take advantage of its current leadership position and future growth and consolidation opportunities, "he said.

The group's results were affected by the Covid outbreak, "which has had a devastating effect globally on the airline and travel sectors." IAG's revenues collapse 55.7% , from 12,026 million to 5,288 million, while net debt rises 38.2%, to 10,463 million

Fleets on land

For much of the semester, most of the group's airline fleets were grounded. Capacity operated in the second quarter decreased 95.3% compared to 2019 and for the semester it decreased by

56.2% over the previous year.

"All IAG airlines suffered substantial losses," Willie Walsh has acknowledged. As a result of government travel restrictions, second quarter passenger traffic fell 98.4% with capacity being reduced by 95.3%.

"We have seen evidence that demand recovers when government restrictions are lifted. Our airlines have implemented measures to provide additional peace of mind for their customers and employees on board and at the airport," said the executive.

Recovery of demand

IAG believes that passenger demand will not recover to pre-pandemic levels until 2023 and is

restructuring its cost base to reduce the size of each airline.

"We continue to expect passenger demand to take at least until 2023 to regain 2019 levels. Each airline has taken steps to adjust its business and reduce its cost base to reflect expected demand in its markets in order not only to overcome this crisis, but to ensure that they remain competitive in a structurally changed industry, "says Walsh.

According to the criteria of The Trust Project

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  • British Airways
  • Iberia
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  • economy

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