International Airlines Group has reported an operating loss of €535 million before exceptional items for the first quarter of 2020, compared to a profit of €135 million for the same period last year.
Total operating losses, including exceptional items relating to fuel and foreign currency hedges, came to €1,860 million for the three months to March 31st.
“The operating result up to the end of February was in line with a year ago,” explained IAG chief executive Willie Walsh.
However, March’s performance was severely affected by government travel restrictions due to the rapid spread of Covid-19 which significantly impacted demand.
“Most of the loss in the quarter occurred in the last two weeks of March.”
The group – which owns Iberia, Aer Lingus and British Airways – said capacity operated in the quarter was down 10.5 per cent on 2019.
However, much sharper drops were seen moving into April, with passenger capacity currently down 94 per cent and most aircraft grounded.
Looking ahead, IAG is planning a “meaningful” return to service in July with a planning scenario that could see an overall reduction in passenger capacity of around 50 per cent in 2020.
However, these plans remain “highly uncertain” and subject to the easing of lockdowns and travel restrictions, IAG said.
“We will adapt our operating procedures to ensure our customers and our people are properly protected in this new environment,” added Walsh.
“We are working with the various regulatory bodies and are confident that changes in regulations will enable a safe and organised return to service.
“The industry will adapt to new requirements in the same way that it has adapted to developments in security requirements in the past.”
IAG added it did not expect passenger demand to recover to the level of 2019 before 2023 at the earliest.
As a result, IAG said it expects to defer deliveries of 68 aircraft.