Today, IAG revealed its first-quarter operating results for 2021. As national travel bans have heavily impacted its airlines, the numbers weren't great. The airline group has been able to drop its weekly operating costs to €175 million ($211 million) per week.
While the United States and China have seen a decent amount of recovery this year, the same cannot be said about Europe. The continent was essentially faced with slow COVID-19 vaccine rollouts, tied with second and third COVID-19 waves around the start of the year. As we move forward into the summer, things are starting to look slightly more optimistic.
The numbers
For the first quarter of the year, the International Airlines Group reported an operating loss of €1.068 billion ($1.29 billion). Of course, with far fewer flights operating and far fewer passengers on those flights, the company's revenue dropped significantly. In the first three months of Q1, the airline group took in €459 million ($554 million), compared to €3.95 billion ($4.77 billion) last year.
Despite the drop in revenue and the significant loss, The airline seems to be in a reasonably good place in terms of its liquidity. According to today's report, the group is currently sitting on €10.5 billion ($12.7 billion), up from €10.3 billion ($12.4 billion) at the end of 2020.
Cargo remains a big part of the business
In the absence of passengers, cargo remains a big part of the business. According to IAG, it operated 1,306 cargo-only flights during the first quarter of the year. By comparison, this is up from 969 in the fourth quarter of 2020.
IAG's cargo-only flights are interesting compared to its biggest rivals such as Air France-KLM and the Lufthansa Group. Both of which have dedicated freighter aircraft. IAG Cargo has none of its own aircraft, relying instead on belly space in its sister airline's bellies. This has seen airlines operating some odd routes, such as Aer Lingus flights from Germany to the US.
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A better summer coming?
Across IAG member airlines, there is hope that the summer will be better for the airlines. Indeed, commenting on the situation in Ireland, IAG CEO Luis Gallego said,
"About Ireland, the situation, as Steve explained before, I will say, It cannot be worse!"
The UK government, which is home to British Airways, has currently banned non-essential overseas travel. This means that people traveling for a holiday currently face fines of up to £5,000. Additionally, the mandatory quarantine and testing requirements make travel unattractive for many others.
This is set to change from May 17th, when the non-essential travel ban will lapse. On the same day, additional countries should be labeled as green, meaning it is much easier to travel from them. Later today, the government is expected to reveal which countries have made the green list. Expect to see a surge in travel for these destinations. This will be a boon for IAG and British Airways in particular.
What do you make of IAG's first quarter? Let us know what you think and why in the comments!