October 29, 2020

IAG admits that the coronavirus will hit its benefit in 2020 after a wave of cancellations in Asia and Italy | Economy



The IAG group, formed by British Airways, Iberia, Vueling, Level and Aer Lingus, has admitted Friday that its results in 2020 will be affected by a crisis caused by the coronavirus (COVID-19), which is causing a weakness in demand on Asian and European routes, especially flights to Italy, as well as business trips, however, the evolution of the crisis is so uncertain that it is not Dare to encrypt the final impact that the virus will have on your accounts this year.

In effect, the holding company indicates that it is prepared to take measures to respond to the crisis as it evolves but then admits that “given the continuing uncertainty regarding potential impact and the duration of COVID-19, it is currently not possible to provide an accurate indication of the profit outlook for the year 2020 “, according to the communication sent this Friday to the CNMV on the occasion of the presentation of 2019 results.

The airline group points out that the capacity on the Italian routes has been significantly reduced for the month of March through a combination of cancellations and changes in the caliber of the aircraft, to which additional capacity reductions will be added in the coming days . It also expects to carry out some capacity reductions along its short radio network.

“At this time, the short radio capacity is not being relocated. The net impact of the current cancellations and the relocation of capacity decreases by approximately 1% the capacity planned for 2020, in terms of seats-kilometer offered, placing the growth by 2% for the whole of the year, “says the company.

The Iberia group has suffered severe falls in the stock market in the last week due to the coronavirus crisis. At the beginning of this Friday’s session, its price yields another 8%, which adds to the losses of 8.85% recorded yesterday. Since the beginning of the year, the shares have lost almost 25% of their value.

“Our operating companies will continue taking mitigating measures in order to align supply and demand according to the evolution of the situation,” says the group, adding that “IAG is resilient, has a solid balance and a cash position. significant to face the current weakness. Our management team has extensive experience in similar situations and we have shown that we can respond quickly to changing market conditions. “

Results 2019

IAG made this notice taking advantage of the presentation of results for 2019, year in which it recorded a net profit of 1,715 million euros, 40.8% less than in the previous year, due to extraordinary charges for 672 pension plans millions.

Profit after taxes before exceptional items stood at 2,387 million euros, representing a decrease of 1.4%, which reflects the fall in profit from operations, due to the effect of the pilot strike at Bristish Airways and to the remarkable increase in fuel prices. The profit from operations stood at 3,285 million, 5.7% less.

Revenue amounted to 25,506 million, which represents an increase of 5.1%, while those of passage rebounded 5% to 22,468 million.Iberia increased its revenues by 9.2% (5,645 million euros) and Vueling, by 5% (2,455 million)

All IAG airlines decreased their profit from operations before exceptional items: Iberia, 6.7%, with 497 million euros; Vueling, 9.3%, with 240 million; BA, 5.1%, with 1.921 million pounds, and Aer Lingus, 11.4%, with 276 million euros. The total income of IAG amounted to 25,506 million euros, which represents an increase of 5.1% (those of passage increased by 5%, with 22,468 million). Iberia increased its revenues by 9.2% (5,645 million euros) and Vueling, by 5% (2,455 million)

“We are facing good results in a year marked by incidents and rising fuel prices,” said CEO, Willie Walsh, who said that due to the coronavirus “at this time it is not possible to provide an accurate indication about the profit outlook for 2020 “.

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