British Airways to Fly 30% Flights Due to Low Demand

British Airways

British Airways owner IAG says that because of new lockdowns. And quarantine measures the airline will be slashing the number of flights this year. Another reason for cutting down the flights is a delay in setting up the Covid testing facility at airports.

The IAG owners say that it’s other airlines. Such as Iberia and Aer Lingus will also fly ‘no more than 30 percent’ of planes. This is for the months from October to December as compared to the same period in 2019. 

The company took this decision as the company unveiled a€1.3billion (£1.2billion) loss in the third quarter. And warned it would miss a key financial target as travelers stay at home instead of going abroad.

However, in September, the struggling group was expecting to operate at around 60 percent. As compared to last year’s capacity in the coming months.

Receiving Less Booking than Expected

But unfortunately, the airlines did not receive many bookings as it was previously expecting. It is due to new lockdowns across Europe. And “an extension of quarantine requirements to travelers from an increasing number of countries”.

In addition, it says, “At the same time, initiatives designed to replace quarantine periods. And increase customer confidence to book and travel. Such as pre-departure testing and air corridor arrangements, have not been adopted by governments as quickly as anticipated”.

Moreover, there has been a further reduction in capacity by other airlines and holiday groups. Such as Tui, in September cut its winter schedule by a further 20 percent to around 40 percent as compared to last year’s capacity. This is because of the continuous changes in travel advice. 

Last month, the International Air Transport Association (IATA) said pre-departure tests for all passengers would be the only way to replace the uncertain and fast-changing quarantine systems that have put people off traveling this summer. 

Financial Crisis

However, airlines show major concerns that not being able to set up a testing facility could also cost more jobs in an industry that is already suffering because of the Covid crisis. 

IAG expects to have recorded losses of €1.3billion (£1.2billion) between July and September. After revenues declined by 83 percent €1.2billion (£1.1billion).

In the same summer quarter last year, the airline raked in revenues of €7.3billion (£6.6billion), making a profit of €1.4billion (£1.3billion). 

However, the group said that, due to a reduction in flights, it will not be able to achieve its target to break even. In terms of net cash flows from operating activities during the fourth quarter.

Net cash flow is a key metric used to measure how fast a company is burning cash. Moreover, IAG shares were down almost 3 percent at 97.54p by 9 am on Thursday.

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