IAG makes £1.7bn loss in H1 as airline expects to double its capacity over next period

IAG will not provide a profit guidance because of the uncertainty surrounding restrictions

IAG, the owner of British Airways, confirmed on Friday that it fell to a €2bn (£1.7bn) H1 loss as travel restrictions continue to work against the airline.

The firm flew at a capacity of 21.9% during Q2, while it is expecting this figure to rise to 45% for the coming quarter.

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Despite the loss being significant, it is half the level of the loss recorded by IAG in 2020, when the pandemic first impacted flights.

Chief executive Luis Gallego praised the UK government’s decision to exempt vaccinated travellers from the EU and US from needing to quarantine on arrival in the UK.

IAG, however, said it would not provide a profit guidance because of the uncertainty surrounding travel restrictions.

As H1 finished, ending on 30 June, the FTSE 100 company had €10.2bn of liquidity after spending previous facilities and issuing €1.2bn of senior unsecured bonds and €825m of convertible bonds, both oversubscribed.

British Airways will defer its monthly pension deficit contributions for £450m between October 2020 and September 2021, as it secured a new revolving credit facility.

“Our focus is on ensuring our operational readiness, so we have the flexibility to capitalise on an environment where there’s evidence of widespread pent-up demand when travel restrictions are lifted,” said chief executive Luis Gallego.

“We welcome the recent announcement that fully vaccinated travellers from amber countries in the EU and the US will no longer have to quarantine upon arrival in the UK. We see this as an important first step in fully re-opening the transatlantic travel corridor.”

The IAG share price is down by 3.33% during the morning session on Friday.

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