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IAG reported an operating loss before exceptional items of €535m for the first quarter of 2020 largely due to the effects of the coronavirus pandemic. This compares with a profit of €135m last year
British Airways is to cut almost 30 per cent of its 42,000 workforce as the coronavirus crisis imposes more stress on the aviation industry.
IAG, the airline’s parent company, warned that a return to 2019 passenger levels would take “several years” and announced plans to cut up to 12,000 jobs.
In a letter to BA staff, chief executive Alex Cruz said that “the outlook for the aviation sector has worsened further” in the past few weeks, adding that “we must take action now”.
Several carriers have moved from furloughing workers to making redundancies. SAS, the Scandinavian airline, said on that it would permanently cut about half of its workforce, up to 5,000 full-time positions, as it warned it would take “some years” for its business to return to normal.
Lufthansa, the German airline group, is considering filing for creditor protection, according to its cabin crew union. Norwegian Air Shuttle warned this week that the bulk of its fleet is likely to remain grounded for the next 12 months.
The company warned that a full recovery would not happen till 2022.
The move to cut jobs comes just weeks after BA agreed a deal with unions to slash costs that led to the furlough of just over 22,000 workers. Earlier this month IAG announced plans to ground about 90 per cent of its fleet in April and May and cancelled its proposed 2019 final dividend, worth €337m, because of the pandemic.
In its preliminary results, IAG said it expected its operating loss in the second quarter to be “significantly worse” than in the first quarter because of the decline in passenger traffic.
IAG reported an operating loss before exceptional items of €535m for the first quarter, compared with a profit of €135m last year. Its pre-tax profit was hit by an exceptional charge of €1.3bn from fuel and currency hedges following the sharp fall in the oil price this year.
It added that total cash and undrawn general and committed aircraft finance facilities amounted to €9.5bn at the end of March, including €6.95bn of cash, cash equivalents and interest-bearing deposits.
