The owner of British Airways has warned that further group wide restructuring will be “essential” for its survival and that it could take up to three years for passenger demand to return to normal.
International Consolidated Airlines Group (IAG) –– which last week announced that 12,000 jobs could be lost at its UK carrier, representing almost a third of its workforce – also owns Iberia, Aer Lingus and Vueling.
Willie Walsh, IAG chief executive officer said the group is planning a “meaningful return to service” in July this year, depending on the easing of lockdowns and travel restrictions around the world.
He added: “However, we do not expect passenger demand to recover to the level of 2019 before 2023 at the earliest. This means group-wide restructuring is essential in order to get through the crisis and preserve an adequate level of liquidity. We intend to come out of the crisis as a stronger group.”
In its quarterly statement, the company revealed that it would be deferring 68 aircraft deliveries in a bid to save cash. It is not known where the deferrals will come from, but the group’s mainline carriers have orders with Airbus totalling more than 500 aircraft. Iberia has the largest share of the orderbook and is due to receive 239 examples from the European manufacturer.
IAG’s remarks come as the company reported a pre-tax loss of €1.86bn for the first quarter of the year. The loss included a €1.3bn charge as currency and fuel hedges became valueless when the oil and exchange markets took a dive. Last year, the company reported a €135m profit for the same period.