IAG, which also owns Air Lingus and Vueling, reported an operating loss of almost € 1.4 billion ($ 1.7 billion) during the first half of 2020. It was successful at € 2.2 billion ( $ 2.6 billion) related to BA’s early retirement. Boeing 747s and Iberia Airbus A340s. The group has canceled or postponed almost half of its scheduled aircraft deliveries until 2022.
Passenger traffic in the second quarter fell by more than 98% over the same period last year. Quarterly revenue fell by about 90%.
“Our industry is facing an unprecedented crisis and the outlook remains uncertain,” Willie Walsh, president, said in a statement. “However, we firmly believe that now is the time to look to the future and strengthen the IAG’s financial and strategic position,” he added.
Qatar Airways is the largest shareholder in the group with a 25.1% stake. IAG said Qatar would support the capital increase, so it provided about 688 million euros ($ 817 million) in new funds.
“Qatar Airways … has confirmed its support for the proposed capital increase and has irrevocably pledged to subscribe to its pro rata right,” IAG said in a statement.
Qatar is looking for two seats on the board. Shareholders will vote on the appointments and the capital increase in September.
Goldman Sachs, Morgan Stanley and Deutsche Bank are subscribing to the remaining rights issues, which could double the number of IAG shares in issue, according to Bernstein senior research analyst Daniel Roeska. “Investors have a choice between doubling their investment or being substantially diluted,” he said in a note.
Shares of IAG fell more than 7% in London on Friday. The group’s net debt has increased by 38% over the past year to almost 10.5 billion euros ($ 12.5 billion).
Airlines are now looking to return their flight schedules anxiously, but demand remains weak and continued government restrictions have even more complicated problems.
IAG’s Walsh said the group was “nowhere” from where it expected to be in July, operating at only 20% of capacity compared to the same month last year. “We had expected to reach 50%,” he told BBC radio on Friday.
Walsh said the UK’s decision to reintroduce quarantine for passengers arriving from Spain after new outbreaks of coronavirus in some parts of the country was “disappointing”, but did not discourage travel to other parts of the country. ‘Europe.
“When the restrictions are lifted, there is clear evidence of accumulated demand and passengers will start flying again,” he added.