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The parent company of Aer Lingus, IAG swung to a pre-tax loss of \u20ac4.2 billion in the first six months of the year.<\/p>\nThe parent company of Aer Lingus, IAG swung to a pre-tax loss of \u20ac4.2 billion in the first six months of the year.<\/p>\n
This is down from a \u20ac1 billion profit in the same period a year ago.<\/p>\n
Revenue was \u20ac5.3 billion, some 56 per cent lower than 2019\u2019s levels.<\/p>\n
Speaking about the Irish airline in their latest report, IAG said:<\/p>\n
“Prior to the main impact of COVID-19 from late February onwards, Aer Lingus capacity was broadly flat for January and February.<\/p>\n
“There were increases in North Atlantic routes, from the route to Minneapolis launched in July 2019, and increased frequencies to Boston and San Francisco, offset by reductions in shorthaul capacity.”<\/p>\n
The Irish airline made a loss of \u20ac189 million, which brought the total deficit for the first half of 2020 to \u20ac316 million.<\/p>\n
IAG also spoke about how Aer Lingus made use of the government’s wage subsidy scheme.<\/p>\n
“Where those employees designated as part of the scheme are eligible to have their wage costs paid up to an amount of \u20ac410 per week.<\/p>\n
“The total amount of such relief received by the Group amounted to \u20ac155 million and is offset within Employee costs in the Income statement.”<\/p>\n
IAG announced a plan to strengthen its balance sheet by raising \u20ac2.75 billion (\u00a32.49 billion) through a proposed capital increase.<\/p>\n
Chief executive Willie Walsh said: \u201cAll IAG airlines made substantial losses. As a result of Government travel restrictions, quarter two passenger traffic fell by 98.4 per cent on a capacity reduction in the quarter of 95.3 per cent.<\/p>\n
\u201cWe have seen evidence that demand recovers when Government restrictions are lifted.<\/p>\n
\u201cOur airlines have put in place measures to provide additional reassurance to their customers and employees on board and at the airport.<\/p>\n
\u201cWe continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels.\u201d<\/p>\n
IAG expects it will take until at least 2023 for passenger demand to recover to pre-coronavirus levels.<\/p>\n
The firm said it is \u201crestructuring its cost base to reduce each airline\u2019s size\u201d.<\/p>\n
In April it announced that 12,000 British Airways jobs could be cut.<\/p>\n