IAG, the British Airways owner, has posted a €7 billion ($8.5 billion) loss for the full year up to December 31st, 2020. The loss comes as the airline group’s revenue plunged due to the impact of the COVID-19 crisis.
Other than dedicated freight carriers, 2020 was a miserable year for the world’s airlines. Many airlines had to face grounding vast swathes of their fleets to avoid running empty flights. While IAG upped its cargo game significantly with 969 cargo-only flights operated in Q4 alone, it wasn’t enough to save the airline group’s financial results for the year.
€7 billion loss
The International Airlines Group is the owner of Aer Lingus, British Airways, Iberia, IAG Cargo, and LEVEL. In addition, it is set to purchase Air Europa for €500 million ($607 million). Rather than reporting each airline’s results separately, the group typically releases financial statements for all the airlines at once. As expected, the airline group did much worse in 2020 than in 2019.
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After-tax, the group posted a loss of €6.9 billion ($8.4 billion). For comparison, this was a €1.7 billion ($2.1 billion) profit in 2019. The loss was largely driven by a huge drop in revenue from passengers. After all, if passengers aren’t flying, a vital revenue tap is turned off. In 2020 passenger revenue dropped 75.5% from €22.5 billion ($27.2 billion) to €5.5 billion ($6.7 billion).
Commenting on the results, IAG’s CEO Luis Gallego said,
“Our results reflect the serious impact that COVID-19 has had on our business. We have taken effective action to preserve cash, boost liquidity and reduce our cost base. Despite this crisis, our liquidity remains strong… “IAG Cargo’s turnover increased by almost €200 million to €1.3 billion. Cargo helped to make longhaul passenger flights viable. In addition, we operated 4,003 cargo-only flights in the year.”
34 aircraft in, 84 aircraft out
Many airlines chose to downsize in 2020, and IAG was no exception. Through the year, 84 aircraft left the fleet, while 34 new aircraft arrived. As such, the fleet dropped by 50 aircraft across the group. Notable retirements included the British Airways Boeing 747-400 fleet (32 aircraft) and the Iberia A340-600 fleet (15 aircraft).
The group took delivery of 34 new aircraft in 2020, down from 45 in the preceding year. This comprised 15 A320 family planes, two A330s, seven A350s, four 777-300s, two 787-10s, and four Embraer E190s. The airline group has 121 commitments for new aircraft moving forwards, including its order for 18 Boeing 777Xs.
With more retirements than deliveries, the airline group’s total fleet at the end of the year had fallen by 10.9% compared to 2019 to 533 aircraft. This was comprised of 367 short-haul jets and 166 long-haul planes. Of these 533 planes, 241 were temporarily grounded as of the end of the year. A further 71 are pending disposal or return to the lessor.
What do you make of IAG’s results for 2020? Let us know what you think and why in the comments!