International Airlines Group continuing to slash costs after huge losses

British Airways owner, International Airlines Group, is continuing to slash costs after a nearly €1.3 billion quarterly loss as the industry restrictions owing to the coronavirus pandemic continue to take its toll.

They announced they would be cutting flights to 30% of normal levels for October to December, blaming the reintroduction of travel limits in the EU on their losses.

They had previously cut costs by 54% from July-August, a move that was key to their survival during the pandemic.

The reported losses were worse than the original analysts' forecasts of €920 million and compared to a €1.4 billion profit margin for the same period last year.

Revenue in the third quarter dropped by 83% and the group warned they may no longer be able to operate on a break-even basis for the final quarter of the year.

IAG also used their quarterly report to call on the government to reintroduce pre-Covid testing to allow travel to resume again during the second wave of infections.

They complained the governments had not adopted the correct measures for dealing with the crisis swiftly enough, which has not given customers the confidence to travel owing to the high risk of infection.

They suggested measures such as pre-departure tests and "air corridors" between flights allowing passengers to travel without the need to quarantine.

This report was the first conducted with new CEO Luis Gallego at the helm. He took over from previous CEO Willie Walsh in late September.

In a statement, Gallego said: “The group has made significant progress on restructuring and we continue to reduce our cost base."

Back in April, German credit agency Scope Ratings predicted massive losses for the airline sector and said the sector will be completely changed by the crisis.

They argued many of these companies will have the "self-help" options available to make it through the crisis.

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