Mateusz Maszczynski is a serving international flight attendant with experience…
The parent company behind British Airways, Iberia and Aer Lingus is to get a €2.75 billion capital injection from its largest shareholder Qatar Airways which it believes will help it to emerge from the COVID-19 pandemic in a stronger financial position. The news emerged as International Consolidated Airlines Group (IAG) posted a record €1.3 billion second-quarter loss after passenger traffic plummeted by over 98 per cent during the period.
The airline group says it plans to bring capacity levels up to 46 per cent of pre-COVID levels in the third quarter and by as much as 74 per cent in the fourth quarter. Those plans are, however, “highly uncertain” and dependent on the continued easing of travel restrictions and lockdowns.
Based on current planning, IAG continues to believe that it could break even by the fourth quarter of 2020 but that it will take until at least 2023 for demand to return to levels seen late last year. Several days ago, the International Air Transport Association (IATA) suggested passenger demand wouldn’t now return until 2024 at the earliest.
As IAG continues to slash costs, as many as 13,000 employees at British Airways alone face being made redundant. Mass redundancies are also on the cards at Aer Lingus, while workforce cuts haven’t been ruled out at Iberia or the low-cost Vueling brand.
IAG’s chief executive Willie Walsh said the group had reached an agreement with Boeing and Airbus to defer the deliveries of 68 new aircraft that had been expected to join the group over the next two years. Walsh didn’t say which airlines would be most affected by the deferrals or when the aircraft might now be expected to be delivered.
British Airways has already announced the early retirement of 32 Boeing 747s and Iberia will permanently ground 15 Airbus A340-600s.
Negotiations to acquire Air Europa, however, remain ongoing with reports suggesting IAG is seeking to halve the previously announced €1 billion purchase price. IAG today said it was seeking a “restructure” of the deal that takes “into account the impact of the COVID-19 pandemic” but said buying Air Europa continued to make “strategic sense”.
In addition to the Qatar Airways-backed €2.75 billion capital increase, IAG recently announced a deal with American Express for a €750 million advance payment in return for selling Airmiles under its Avios currency. Qatar Airways, which owns a 25.1 per cent in IAG, will acquire two non-executives seats on the board under the terms of the deal which will need to be approved at a shareholders meeting on September 8.
Mateusz Maszczynski is a serving international flight attendant with experience at a major Middle East and European airline. Mateusz is passionate about the aviation industry and helping aspiring flight attendants achieve their dreams. Cabin crew recruitment can be tough, ultra-competitive and just a little bit confusing - Mateusz has been there and done that. He's got the low down on what really works.