IAG cautions about uncertain 2021 after huge 2020 loss

Airline group IAG expects to offer around 20pc of travel capacity in the first quarter of this year, and has cautioned that the outlook beyond that remains highly uncertain.

The group, which operates British Airways, Iberia and Aer Lingus among others, today said that even though Covid-19 vaccination programmes should facilitate a recovery in international air travel demand through relaxations of travel restrictions, the timing of any re-openings are unclear.

"We know there is pent-up demand for travel and people want to fly," chief executive Luis Gallego said. "Vaccinations are progressing well and global infections are going in the right direction. We are calling for international common testing standards and the introduction of digital health passes to reopen our skies safely."

IAG offered 66.5pc less capacity in 2020 than in 2019, with a loss of routes in Europe and Asia-Pacific making up the highest share of that reduction. The group's capacity in Europe fell by 70.5pc year on year, because many of its airlines had to limit operations to their home markets. Capacity in Asia-Pacific, the first region to be affected by cancellations, fell by 70.7pc. Restrictions still limit capacity that can be offered.

A total of 31.27mn passengers travelled with IAG in 2020, down by 73.8pc on the year, with Ireland-based Aer Lingus having the deepest decline of 81.8pc.

IAG's fuel, oil and emissions costs fell by 38pc year on year to €3.7mn, as a result of reduced capacity and the replacement of older aircraft with a newer more fuel-efficient fleet.

IAG made an loss of €6.92bn in the year to 31 December, compared with a profit of €1.72bn in the prior year.

By Florence Schmit