London: IAG, the owner of British Airways and the Spanish carrier Iberia, said on Friday that it incurred a net loss for 2020 of 6.9 billion euros as the coronavirus pandemic crippled air travel.
In its results statement, IAG said it was a huge loss after tax compared to a net profit of 1.7 billion euros in 2019
Revenue decreased nearly 70% to 7.8 billion euros from 25.5 billion euros as passenger capacity shrank.
Passenger numbers are still significantly lower than pre-pandemic levels.
“Our results reflect the critical impact the Covid-19 virus has had on our business,” said IAG CEO Luis Gallego.
The group said that the carrying capacity was only 33.5% from the previous year and was still “adversely affected by the Covid-19 epidemic, along with government restrictions and quarantine requirements.”
IAG, whose portfolio also includes Irish company Aer Lingus, is campaigning painfully to cut costs and cut thousands of jobs as it deals with the spectacular downturn in international aviation.
The company said it had already cut “the vast majority” of its 10,000 British Airways jobs – or a quarter of the company’s workforce – plus 500 jobs at Air Lingus.
It previously reported about 13,000 BA jobs cut.
“We have taken effective measures to preserve liquidity, enhance liquidity and reduce our cost base. Despite this crisis, our liquidity remains strong,” Gallejo said.
IAG has liquidity at € 10.3 billion, including a € 2.7 billion capital increase and a € 2 billion loan commitment agreed in December.
Non-fuel costs sank 37.1% last year.
“The group continues to reduce its cost base and increase the proportion of variable costs to better match market demand,” said Gallego.
“We are transforming our business to ensure we appear in a stronger competitive position.”
The pandemic has devastated demand for air travel and halted plans around the world.
The International Air Transport Association expects global air passenger transport to recover more slowly than expected this year, as coronavirus variants cause contagion outbreaks, forcing governments to take additional measures to limit its spread.