Skip to main content
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
// //

British Airways-owner IAG said summer capacity would rise to 45% of pre-pandemic levels, a more cautious bet than rivals as its transatlantic business has yet to fully reopen.

IAG’s 45% Q3 capacity plan is a significant jump over the 22% it flew in the March-June quarter, but puts it some way behind Air France-KLM , easyJet and Ryanair , which IAG’s CEO blamed on the partial closure of the U.S. market.

“The weight of our network is balanced to the Atlantic,” Chief Executive Luis Gallego told reporters on Friday, adding that it was possible that IAG would beat its 45% plan this quarter.

Story continues below advertisement

“That’s what we think we are going to fly, but we are ready to fly more,” he said.

For the October-December quarter, IAG was ready to fly up to 75% of its 2019 capacity, he said.

British Airways, usually IAG’s most profitable airline, has been hammered by restrictions in its home market that have been tighter and lasted longer than those in Europe, allowing the group’s Spanish airlines Iberia and Vueling to recover faster.

They are set to fly around 70% of their capacity this summer, showing how UK restrictions and last minute rule changes have dragged on BA.

Britain will lift more restrictions on arrivals from the United States on Monday, allowing a partial reopening of the transatlantic, but the United States continues to be closed to UK and European arrivals.

Shares in IAG traded down 3% in early deals. The stock has gained 24% over the last six months.

“Further opening up of the U.S. market during Q3, which may yet happen, would be a significant catalyst for the stock,” said Bernstein analyst Daniel Roeska.

Story continues below advertisement

Air France-KLM, which compared to BA has benefited from the earlier opening of Europe to U.S. passengers, said on Friday it expected third quarter capacity at 60-70% of 2019 levels.

Short-haul rivals EasyJet and Ryanair are also ahead of IAG, aiming for 60% summer capacity and July passenger numbers at two-thirds of 2019 levels respectively.

Low levels of flying due to ongoing pandemic restrictions meant that for the three months to the end of June, IAG reported an underlying operating loss of 1.045 billion euros ($1.24 billion), in line with a consensus forecast for a 1.036 billion euros loss.

The group declined to give a profit forecast, citing COVID-19 uncertainty. It said it had liquidity of 10.2 billion euros and it continued to preserve cash by reducing its cost base.

Asked if there could be further redundancies after BA last year announced more than 10,000 jobs would go, Gallego said that was not what he expected, but that he would like to see the UK furlough scheme extended to the end of 2021.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies