British Airways parent International Consolidated Airlines (IAG) fell 1.7% despite sharply narrowed third quarter losses as 2021 guidance for a €3 billion loss was slightly worse than analysts’ forecasts.
The company narrowed losses in the three months to 30 September as capacity continued to improve supported by growth from its Iberia and Vueling airlines.
For the three months ended 30 September, pre-tax losses came in at €714 million compared with €2 billion for the same period a year earlier.
Passenger capacity in Q3 was 43.4% of 2019, up from 21.9% in the second quarter. Iberia and Vueling continued to be the best performers within the group. ‘Iberia returned to profitability while Vueling reached breakeven at the operating level,’ the company said.
IAG touted a further improvement in capacity for the fourth quarter to around 60% of 2019 levels, as transatlantic travel is set to fully reopen, though capacity for the year as a whole is expected to average 37%.
TRANSATLANTIC CORRIDOR VITAL
‘The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry. British Airways is serving more US destinations than any transatlantic carrier and we’re delighted that we can get our customers flying again,’ the company said.
AJ Bell investment director Russ Mould commented: ‘The best news for IAG in recent weeks has been the reopening of travel to North America. The long haul route from London and New York had been British Airways’ jewel in the crown for some time and if the business is to truly shine it needs a steady flow of passengers between the two cities.
‘This dependence on long haul flights has been reinforced after IAG’s apparent adoption of a plan to launch a budget short haul carrier was abandoned almost as soon as it was announced recently.
‘The company says it is seeing some signs of recovery in business travel, however the chances of this returning to pre-pandemic levels, certainly in the near term, look slim.’
