BUSINESS NEWS
IAG loses €1.3bn in summer quarter as traffic plunges 88%
British Airways owner IAG reported a €1.3 billion loss for the three months to September and revised down its forecasts with group carriers set to operate just 30% of capacity for the rest of the year. IAG had previously announced
it would operate 40% of the capacity level of 2019 through to December. The revision came after
passenger traffic in the three months remained 88% down year on year and flights over the peak-summer period operated on average just under half full. The losses for July to September
were greater than the group’s quarterly revenue of €1.2 billion. IAG owns Iberia, Barcelona-
based Vueling and Aer Lingus as well as BA. In a statement, IAG said:
“Bookings have not developed as previously expected due to additional measures implemented by many European governments.” The group insisted its liquidity
“remains strong”, with €6.6 billion available at the end of September comprising €5 billion in cash and €1.6 billion in credit facilities. It said a further €2.74 billion in capital became available in early October.
Business travellers support Covid tests to ease quarantine – GBTA
Corporate travellers favour rapid Covid tests prior to departure to reduce or replace quarantine restrictions, according to a Global Business Travel Association (GBTA) poll. Almost two-thirds (63%) of
GBTA members in Europe saw government travel restrictions as the greatest barrier to travel, against 43% worldwide. The poll found 90% of GBTA member companies not open to international travel and only two-thirds (68%) sanctioning domestic travel. A third (32%) cited company
policy as a barrier to travel, with just 9% identifying employee reluctance to travel. Four out of five GBTA
respondents (82%) rated face-to- face meetings ‘more’ effective than virtual meetings, with just 14% rating the latter ‘equally effective’ and 2% better. GBTA called on the UK
government to “rethink” its plans for a Covid ‘test and release’ system. Catherine Logan, GBTA regional
vice-president for Europe, said: “The current patchwork approach to travel is prolonging the effects of Covid-19 on the industry and the economy.” Three out of five (59%) reported
their firms had cut staff numbers as a result of the pandemic and 62% considered further job cuts ‘likely’ or ‘very likely’. The GBTA poll was conducted on October 12-16 among 927 respondents.
Wratten fears 60% of jobs to go Ian Taylor
The rate of job losses at travel management companies could hit 60% in the coming days, Business Travel Association chief executive Clive Wratten has warned. Wratten told Travel Weekly:
“It’s a catastrophe. From talking to members, we think 60% of jobs will be lost by the end of October and it could get worse. That is jobs members are planning to axe or have already axed. It’s so distressing.” He holds out little hope of
an immediate restart of business travel and dismissed the impact of a reduction in quarantine through a ‘test and release’ regime, saying a release from quarantine after seven or eight days “will make very little difference” for business travel. But he believes corporate traffic
travelweekly.co.uk
could rise sharply once it does resume, arguing: “It will be a slower start but a faster ramp-up.” Wratten said: “It’s going to be
well into 2021 before we see any real emergence of business travel. Business travel will be slower off the blocks, but the spike will be higher than the leisure travel spike. A significant part of business travel will start quickly.” He added: “We need people back
in their offices – then we can get travelling again.” The BTA is consulting members
and corporate clients on pricing models based on a white paper published in mid-October which laid out the strengths and weaknesses of the current structure of transaction, subscription and management fees. The aim is to bring clarity to the
process and develop standards for the different fee models.
Wratten said: “We planned to do
this anyway, but Covid accelerated the process. The world has moved on but the model has not, and we have to start thinking beyond the here and now.” He explained: “Transaction fees
benefit the corporate and give the TMC cashflow. The downside is the corporate sees the fee and thinks ‘why am I paying?’ And during Covid, the TMC is doing the work and not getting paid. “Subscription fees provide
regular income. But is a subscription on behalf of the traveller or the company? Management fees suit large corporates, but don’t work for smaller companies. “We hope to come out of this with
standards for each model. The next stage will be consultation around the models and standards. Then we’ll widen the discussions to suppliers.”
29 OCTOBER 2020 Clive Wratten 71
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