By Karen Peattie
THE stark reality of the challenges facing the beleaguered aviation sector came into sharp focus yesterday when International Airlines Group, the parent company of British Airways, reported a €1.3 billion (£1.17bn) loss for the third quarter of the year to the end of September and downgraded its outlook amid coronavirus restrictions.
IAG, which owns Aer Lingus and Iberia, said fewer than 50 per cent of seats were filled on its flights that operated during the period from July to September. In the same period last year, the group reported profit of nearly €1.4bn.
It confirmed that “in response to the high uncertainty of the current environment” its plans for capacity in the fourth quarter would be no more than 30% compared to 2019. IAG also said that it “no longer expects to reach break even in terms of net cash flows from operating activities during Q4".
IAG said in a statement: “Recent overall bookings have not developed as previously expected due to additional measures implemented by many European governments in response to a second wave of Covid-19 infections, including an increase in local lockdowns and extension of quarantine requirements to travellers from an increasing number of countries.
“At the same time, 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.”
Detailed results for the third quarter will be released as planned on October 30.
A recent management shake-up after the departure of IAG’s chief executive Willie Walsh last month saw BA’s chief executive Alex Cruz leave the company to be replaced by Sean Doyle, Aer Lingus chairman and chief executive – he will also take over as chairman of BA after a transition period.
In Scotland, BA operates flights from Edinburgh, Glasgow, Aberdeen and Inverness airports. Earlier this month, Edinburgh Airport revealed that the number of people travelling through the airport over the normally busy summer months had fallen by 91% due to the impact of Covid-19.
The chief executive of Edinburgh Airport, Gordon Dewar, called for a “robust testing regime which will protect public health, provide reassurance, and see travel and tourism begin to rebuild”.
Revealing that he does not expect the airport to break even until 2021, he said: “These figures highlight the huge impact Covid-19 has had and continues to have, something that is being felt across the travel and tourism industries and the economy as a whole.
“Our business plans have been in a constant state of flux due to circumstances worsening, the introduction of and constant changes to quarantine and, of course, all of this feeds into passenger confidence.
“We need to see a robust testing regime which will protect public health, provide reassurance and see travel and tourism begin to rebuild.”
Derek Provan, the chief executive of AGS Airports, parent company of Glasgow, Aberdeen and Southampton airports, told a Glasgow Chamber of Commerce event this week that the current Government quarantine policy is “a blunt instrument that’s delivered a hammer blow to our industry” and called for an international approach to finding a global solution to the pandemic.
Airlines and airports across the world have seen widespread redundancies as travellers worry about social distancing on board aircraft and possible quarantine restrictions on their return from overseas.
This week, Heathrow was the first UK airport to offer passengers travelling to Hong Kong the option of paying for an £80 pre-booked rapid test before check-in.
Both easyJet and Ryanair have cut their winter flight schedules and warned of significant losses this year.
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