IAG to increase flights after missing 2Q target

Airline group IAG plans to increase flights over the next few months after falling slightly short of its second-quarter target.

The group — which operates British Airways, Iberia and Aer Lingus among others — operated at just 21.9pc of pre-pandemic passenger capacity in April-June, just shy of its 25pc forecast. It plans to reach 45pc of pre-Covid capacity in the third quarter on the back of easing travel restrictions, although it warns that its plans remain "uncertain and subject to ongoing review".

IAG's plan to ramp up flights follows the UK's decision this week to ease travel restrictions for US and EU travellers. "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," chief executive Luis Gallego said today. "We see this as an important first step in fully reopening the transatlantic travel corridor."

IAG expects the recovery in travel demand to be uneven among both its airlines and the destinations they serve. In the second quarter, Iberia and Vueling Airlines saw the most success, benefiting from an improved market for domestic flights in Latin America and Spain driven by fewer travel restrictions. "In the short term, 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," Gallego said.

IAG's capacity — measured in available seat kilometres — halved on the year in January-June. And passenger numbers fell by 60pc to 8.1mn, although the decline was capped by an uptick in the second quarter. Last year, the impact of Covid-19 on passenger numbers was mainly limited to the period from March onwards.

The drop in customers led to a 58pc year-on-year fall in revenue to €2.21bn in the first half of 2021. But a sharp drop in operating expenditure, notably lower fuel costs, helped IAG narrow its loss to €2.05bn in January-June from €3.81bn in the same period last year.

By Bea O'Kelly