Welcome to London Air Travel’s Monday Briefing for the week beginning 26 October 2020.
Luis Gallego Unveils His First Results As IAG CEO
This Friday, 30 October 2020, Luis Gallego will present his first set of quarterly results as CEO of IAG.
Sean Doyle will also address investors for the first time in his capacity as CEO of BA.
We have a preview of what to expect. Last week, IAG announced a preliminary operating loss of €1.3 billion for the quarter to 30 September.
Revenue declined 83% to €1.2 billion, with revenue passenger kilometres falling by 88%. Average load factors fell by 38.8 percentage points to 48.9%. None of these numbers were broken down by airline.
Capacity for the 4th quarter will be no less than 30% of last year’s levels. BA has pulled at short notice some long-haul routes that were due to resume next month including Denver, Las Vegas and Seoul. IAG has also abandoned any hope of breaking even on a cash flow basis by the end of this year.
On a more positive note, IAG’s cash balance remains strong with €6.6 billion of cash at the end of September, plus €2.74 billion from its recent rights issue.
However, some debt has to be repaid in the first half of next year. With IAG’s three European markets, Ireland, Spain and the UK, facing tighter restrictions, traffic is likely to be severely depressed well into 2021.
Air France-KLM and Lufthansa will also announce their third quarter results on 30 October and 5 November respectively. Ordinarily at this time of year, IAG also holds its annual Capital Markets Day, but no event has been scheduled yet.
Back to Sean Doyle, he will be a panellist at a Royal Aeronautical Society event on climate change next month.
Heathrow’s £17 Billion Debt Mountain
Heathrow is also due to report its third quarter results this week, on Wednesday 28 October at 15:00.
Yesterday’s Sunday Telegraph reported Heathrow has warned its shareholders they may have to provide financial support to the heavily indebted airport. Heathrow owes, through a horrifically complicated structure, a large number of banks and bondholders no less than £17 billion with an annual interest bill of £500m.
Airlines and regulators have understandably balked at the suggestion that Heathrow’s lost income should be compensated for through higher passenger charges.
Heathrow clearly expects to benefit from airlines consolidating London operations at the airport and available slots being filled by new entrants, but it will be expected to take its share of the pain of COVID-19.
Quarantine To Be Waived For The “Jet Set”?
Somebody briefed yesterday’s Sunday Times, possibly not with the intention of encouraging support for the government, that the mandatory quarantine regime may be waived for the “jet set”.
This is said to include those most loved professionals “senior bankers, hedge fund managers and executives involved in high-value deals” who “come in private jets and have a chauffeur-driven car”.
Given the way the UK government has been harangued in recent days for its inability to “read the room” this could well have been leaked to torpedo these plans.Continue reading “London Air Travel’s Monday Briefing – 26 October 2020”