International Cons Airlines Group IAG's actions to address COVID-19's impact (2357G)
16 Marzo 2020 - 8:03AM
UK Regulatory
TIDMIAG
RNS Number : 2357G
International Cons Airlines Group
16 March 2020
IAG's actions to address COVID-19's financial impact
The rapid spread of COVID-19, and associated government travel
restrictions and advisories are having a significant and
increasingly negative impact on the demand for global air traffic
on almost all routes operated by IAG's airlines.
To date IAG has suspended flights to China, reduced capacity on
Asian routes, cancelled all flights to, from and within Italy and
made various changes to our network.
The US Presidential announcement to restrict entry of foreign
nationals who have been in countries in the Schengen Area, the UK
and Ireland has added to the uncertainty on North Atlantic routes.
In addition, many other countries have banned or are restricting
inward travel including Argentina, Chile, India and Peru. Spain has
also been the subject of travel advisories, for example by the UK
Foreign and Commonwealth Office (FCO).
IAG is implementing further initiatives in response to this
challenging market environment. Capacity, in terms of available
seat kilometres, in the first quarter of 2020 is now expected to be
reduced by around 7.5 per cent compared to last year. For April and
May, the Group plans to reduce capacity by at least 75 per cent
compared to the same period in 2019.
IAG is also taking actions to reduce operating expenses and
improve cash flow. These include grounding surplus aircraft,
reducing and deferring capital spending, cutting non-essential and
non-cyber related IT spend, freezing recruitment and discretionary
spending, implementing voluntary leave options, temporarily
suspending employment contracts and reducing working hours.
Given the continued uncertainty on the potential impact and
duration of COVID-19, it is still not possible to give accurate
profit guidance for the full year 2020.
The Group has strong liquidity with cash, cash equivalents and
interest-bearing deposits of EUR7.35 billion as at 12 March. In
addition, undrawn general and committed aircraft backed financing
facilities amount to EUR1.9 billion, resulting in total liquidity
of EUR9.3 billion.
Willie Walsh, IAG's chief executive, said: "We have seen a
substantial decline in bookings across our airlines and global
network over the past few weeks and we expect demand to remain weak
until well into the summer. We are therefore making significant
reductions to our flying schedules. We will continue to monitor
demand levels and we have the flexibility to make further cuts if
necessary. We are also taking actions to reduce operating expenses
and improve cash flow at each of our airlines. IAG is resilient
with a strong balance sheet and substantial cash liquidity."
In light of the exceptional circumstances facing the aviation
industry due to COVID-19, and in particular the developing
situation in Spain, it has been decided that Luis Gallego will
continue in his role as Iberia chief executive for the next few
months to lead the response in Spain. In the meantime, Willie Walsh
will continue to act as Group chief executive and Javier Sanchez
will remain in place as Vueling chief executive.
Antonio Vázquez, IAG's chairman, said: "As we respond to
COVID-19, Willie, Luis and the board of IAG have decided that
management stability across the Group should be a priority in the
near term. We are grateful that Willie has agreed to delay his
retirement for a short period at this challenging time."
Stephen Gunning
Chief Financial Officer
16 March 2020
Analyst and investor conference call
A conference call for analysts and investors will be held today,
16 March 2020, at 8:00am UK time (9:00am CET).
Participant code: 5559822
Location Number
------------------------ ---------------
United Kingdom, London +44 2071 928000
Spain, Madrid +34 914146280
Ireland, Dublin +353 14319615
United States, New York +16315107495
France, Paris +33 176700794
Germany, Frankfurt +49 6924437351
Netherlands, Amsterdam +31 207143545
Italy, Rome +39 687502026
Switzerland, Bern +41 315800059
------------------------ ---------------
Please dial to the conference call 5-10 min prior to the
schedule time in order to minimize and reduce any potential hold
times.
LEI: 959800TZHQRUSH1ESL13
This announcement contains inside information and is disclosed
in accordance with the Company's obligations under the Market Abuse
Regulation (EU) No 596/2014.
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END
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