Continued from page 48

There might be some judicious culling of capacity. We’ll manage it on a weekly basis. We’re down to skeleton flight levels in Europe. We don’t want to collapse that. “Our utmost effort is to keep

aircraft flying even if it is only one or two flights a day, to keep pilots and cabin crew flying so we can move quickly. “There are people moving

about, mainly for work. “We’re not doing free travel,

there is no point. We’re not dumping prices.” He added: “A lot depends on

how Christmas is, on whether European governments impose lockdowns. We would normally have a huge flow of cash coming in January-February, but the booking profile is very short term. We just have no idea what January will look like.” However, O’Leary insisted:

“Ryanair will emerge from this with a stronger cost base. We’re in extensive negotiations with airports on where we can return quickly. Airports that come with the best incentives will see traffic return quicker. “A huge amount of capacity

has been taken out and won’t return. We’ll fill those gaps. We’ll be opportunistic and entirely flexible.” But he argued price levels

would be more difficult to restore. O’Leary said: “Pricing in the recovery will be much stronger than we have seen previously. “I listen to [those who say]

‘it will take two years, three years to recover’. It’s bullshit. It will take 12 months to come back. Pricing will stimulate a rapid volume recovery. The question is when pricing comes back. That will be much longer.”

Air France-KLM posts €1.7bn loss for July-September

Air France-KLM reported a €1 billion operating loss for the three months to September and a net loss of almost €1.7 billion. Group losses for the first

nine months of the year passed €6 billion. However, Air France- KLM reported agreements with trade unions on “substantial restructuring plans”. These will see 5,000 jobs or 15%

46 5 NOVEMBER 2020

IAG renews testing calls as losses in 2020 near €6bn

Ian Taylor

British Airways owner IAG reported an operating loss of almost €6 billion for the nine months to September against a profit of €2.5 billion for the same period last year and called again for pre-departure testing to relax travel restrictions. Mounting losses saw the group,

which includes Iberia, Vueling and Aer Lingus, report a €1.3 billion operating loss for July to September and nine-month loss of €5.95 billion. The loss after tax was €5.6 billion.

Almost €1.6 billion of the losses

were due to over-hedging on fuel and foreign currency. In a statement, IAG said: “Demand

continues to be adversely affected by volatile government restrictions and quarantine requirements.” Group chief executive Luis

Gallego, who took over from Willie Walsh last month, said: “These results demonstrate the impact of Covid-19 but they’re exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business.

“We are calling on governments

to adopt pre-departure testing using reliable and affordable tests, with the option of post-flight testing, to release people from quarantine where they are arriving from countries with high infection rates.” Gallego insisted: “When we open

routes, there is pent-up demand for travel.” However, he reported: “We expect it will take until at least 2023 for passenger demand to recover to 2019 levels.” IAG plans capacity in the final

weeks of the year to be no more than 30% of 2019’s level. It warned investors: “The group

no longer expects to break even during quarter four.” The group had €5 billion in cash

available at the end of September, almost €1.7 billion less than at the start of the year, but reported it raised a further €2.74 billion on October 2. Gallego said: “This strengthens

Luis Gallego

our financial and strategic position and makes IAG better placed to take advantage of a recovery in demand.”

of the workforce at KLM go by the end of the year. Air France will cut 4,000 by the end of 2020 and 8,500 by 2022. The plans have been submitted to

the French and Dutch governments. They retain significant stakes in the carriers and have made aid available in loans and credit guarantees – France providing Air France with €7 billion and the Netherlands advancing €4 billion to KLM. Air France-KLM reported

“a positive demand-recovery trend until mid-August” before “a disappointing September”, noting “visiting friend and relative

demand” drove summer traffic. It warned the new lockdown in

France “will weigh on the group’s activities”, but reported liquidity or credit to the value of €12.4 billion at the end of September.

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