International Airlines Group has published its full-year financial figures to December 31, 2020, showing an operating loss of just over €7.4 billon, compared to a profit of €2.6 billion in 2019.

Capacity for the year was just 33.5 per cent of pre-pandemic levels in 2019 – it fell to as low as just 5 per cent during the second quarter of last year following the onset of Covid-19, before improving in the third quarter.

IAG said that “Where travel restrictions were removed the Group saw a strong level of travel demand from customers”, but plans to steadily increase capacity during the fourth quarter had to be revised “as a second wave of infections swept across Europe and governments re-imposed lockdowns and travel restrictions”.

The continued uncertainty surrounding the impacts and duration of Covid-19 means IAG is not providing a profit guidance for 2021, but the group expects capacity to decrease further to just 20 per cent in the first quarter of 2021.

“Our results reflect the serious impact that Covid-19 has had on our business,” said IAG’s CEO Luis Gallego.

“We have taken effective action to preserve cash, boost liquidity and reduce our cost base. Despite this crisis, our liquidity remains strong. At 31 December, the Group’s liquidity was €10.3 billion including a successful €2.7 billion capital increase and £2 billion loan commitment from UKEF. This is higher than at the start of the pandemic.

“In 2020, our capacity decreased by 66.5 per cent while our non-fuel costs went down 37.1 per cent thanks to the extraordinary effort across our business. The Group continues to reduce its cost base and increase the proportion of variable costs to better match market demand. We’re transforming our business to ensure we emerge in a stronger competitive position.

“IAG Cargo’s turnover increased by almost €200 million to €1.3 billion. Cargo helped to make longhaul passenger flights viable. In addition, we operated 4,003 cargo-only flights in the year.

“I would like to thank our employees across the Group for their remarkable commitment, resilience and flexibility through this crisis. They have adapted quickly to new ways of working and made big sacrifices in terms of salary and working time. Our people have played a central role in all we have achieved during these challenging times.

“The aviation industry stands with governments in putting public health at the top of the agenda. Getting people travelling again will require a clear roadmap for unwinding current restrictions when the time is right.

“We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction. We’re calling for international common testing standards and the introduction of digital health passes to reopen our
skies safely.”