The International Consolidated Airlines Group (IAG) saw its share price fall considerably in the early morning trade on Friday, heading the top FTSE 100 fallers at a 1.85% drop to 144.6p.
The company reported that its losses had fallen from its record £7.8 billion in 2020 to £3.5 billion, alongside an increase in revenue of 8.3% to £8.5 billion.
IGA further reported operating losses before exceptional items of €2.97 billion for the end of 2021 against losses of €4.39 billion in 2020.
The company added that its passenger capacity was 58% of its 2019 capacity prior to Covid-19 for its fourth quarter, marking an increase from 43% in its third quarter.
IGA’s full-year capacity was reported at 36% of 2019, with the Covid-19 pandemic and the introduction of the Omicron variant denting the company’s revenue.
The travel company is aiming for its passenger capacity this year to hit approximately 65% of 2019 levels in the first quarter of 2022, followed by an 85% capacity for the entire year.
“We are confident that a strong recovery is underway. Our teams across the Group are taking every opportunity to develop our business while capitalising on the surge in bookings when travel restrictions are lifted,” said Luis Gallego, CEO at IAG.
“Our people’s extraordinary work and dedication has been key to weather this crisis. We are also monitoring recent geopolitical events closely to manage any potential impact.”
“Demand slowed down for very near-term trips following the emergence of Omicron in late November.”
“However, bookings have remained strong for Easter and summer 2022 having picked up in the New Year. We expect a robust summer with IAG returning to around 85% of its 2019 capacity for the full year.”
“As we ramp up operations our customers remain at the heart of everything we do.”
“We know that after the worst crisis in aviation’s history we must do things differently. Our model enables us to capture revenue and cost synergies while maximising efficiencies which means we are set up to return to profitability in 2022.”
AJ Bell investment director Russ Mould added: “Covid’s multiple variants have weighed on sentiment towards wanting or being permitted to fly, which has put a lot of financial pressure on airlines. Now we have the war between Russia and Ukraine making some people nervous about wanting to get on a plane again.
“All of this adds up to a big headache for International Consolidated Airlines which continues to lose money.
“While its loss after tax narrowed considerably in 2021, net debt has ballooned and capital expenditure is set to increase more than five-fold in 2022 to €3.9 billion as it must rebuild capacity, take delivery of aircraft delayed from last year and meet delivery payments deferred from previous years.”
“International Consolidated Airlines will have to become more creative to try and win back the business customer or reconfigure its strategy to encourage more leisure travellers to fly further on its planes.”