International Consolidated Airlines Group (IAG) today (October 30, 2020) presented Group consolidated results for the nine months to September 30, 2020.

The results for the nine months were significantly impacted by the outbreak of COVID-19, which has had a material impact on the global airline and travel sectors, particularly from late February 2020 onwards and with no immediate signs of recovery.

COVID-19 situation and management actions:

·     Increased flying programme in quarter 3 versus quarter 2, partly driven by summer leisure demand, with additional operating procedures implemented to protect customers and staff, including facemask use and additional cleaning. Demand continues to be adversely affected by volatile government restrictions and quarantine requirements

·      1,115 additional cargo flights operated in quarter 3 to transport critical equipment and essential supplies

·      In response to the high uncertainty of the current environment IAG now plans for capacity in quarter 4 to be no more than 30 per cent compared to 2019. As a result, the Group no longer expects to reach breakeven in terms of Net cash flows from operating activities during quarter 4

·      Cost reduction actions implemented across the Group, including employee cost reductions in Spain through the use of ERTE arrangements and wage support schemes in Ireland and the UK, together with supplier cost reductions, leading to cash operating costs for quarter 3 reducing by 54 per cent from original plans to €205 million per week

·      Agreements reached with most employee groups at British Airways. Exceptional cost of €275 million in quarter 3 related to British Airways and Aer Lingus, corresponding to a reduction in employee numbers of approximately 10,000

·      Liquidity in quarter 3 was boosted by renewal of the multi-year agreement with American Express, including an €830 million payment, a significant part of which is for Avios pre-purchase

·      Capital increase successfully completed, with gross proceeds of €2.7 billion received in October

IAG period highlights on results:

·      Passenger capacity operated in quarter 3 down 78.6 per cent on 2019 and for the period of nine months down 64.3 per cent on 2019

·      Third quarter operating loss €1,300 million before exceptional items (2019 operating profit: €1,425 million)

·      Operating loss before exceptional items for the nine months €3,200 million (2019 operating profit: €2,520 million)

·      Exceptional charge in the period of nine months of €2,755 million on derecognition of fuel and foreign exchange hedges, impairment of fleet and restructuring costs; exceptional charge for quarter 3 €618 million

·      Loss after tax before exceptional items for the period of nine months €3,176 million, and nine months statutory loss after tax and exceptional items: €5,567 million (2019 profit: €1,814 million)

·      Cash of €5,011 million at September 30, 2020 down €1,672 million on December 31, 2019. Committed and undrawn general and aircraft facilities were €1.6 billion, bringing total liquidity to €6.6 billion. Including €2.7 billion gross proceeds from the capital increase (received in early October) gives total pro-forma liquidity of €9.3 billion

Performance summary:


Nine months to September 30

Highlights € million




Higher / 


Passenger revenue 





Total revenue





Operating (loss)/profit before exceptional items 





Exceptional items 





Operating (loss)/profit after exceptional items 










Available seat kilometres (ASK million) 





Passenger revenue per ASK (€ cents) 





Non-fuel costs per ASK (€ cents) 




85.3 %






Alternative performance measures




Higher / 


(Loss)/profit after tax before exceptional items (€ million)





Adjusted (loss)/earnings per share (€ cents) 





Net debt (€ million)2




46.6 %

Net debt to EBITDA2










Statutory results € million




Higher / 


(Loss)/profit after tax and exceptional items





Basic (loss)/earnings per share (€ cents) 





Cash and interest-bearing deposits2 





Interest-bearing long-term borrowings2 




13.0 %

For definitions refer to the IAG Annual report and accounts 2019.

1 The 2019 results include a reclassification of the costs the Group incurs in relation to compensation for flight delays and cancellations as a deduction from revenue as opposed to an operating expense. There is no change in operating profit. The amount reclassified for the nine months to September 30, 2019 was €107 million. Further information is given in the IAG Annual report and accounts 2019.

2 The prior year comparative is December 31, 2019.

Luis Gallego, IAG's Chief Executive Officer, said:

"In quarter 3 we're reporting an operating loss of €1,300 million before exceptional items compared to an operating profit of €1,425 million last year. The total operating loss was €1,918 million, including exceptional items relating to fuel hedges plus restructuring costs at British Airways and Aer Lingus.

"These results demonstrate the negative impact of COVID 19 on our business but they're exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business effectively.

"We are calling on governments to adopt pre-departure testing using reliable and affordable tests with the option of post flight testing to release people from quarantine where they are arriving from countries with high infection rates. This would open routes, stimulate economies and get people travelling with confidence. When we open routes, there is pent up demand for travel. However, we continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels.

"The Group has made significant progress on restructuring and we continue to reduce our cost base and increase the proportion of our variable costs.

"We have also successfully completed a €2.74 billion capital increase in the quarter. It strengthens our financial and strategic position and makes IAG better placed to take advantage of a recovery in air travel demand."

Trading outlook

As announced on February 28, 2020, given the uncertainty on the impact and duration of COVID-19, IAG is not providing profit guidance for 2020.