IAG 1st Quarter Results
May 7, 2020, 1:43 am
#1
Original Poster
Join Date: Jun 2003
Programs: BA, IHG, 5C
Posts: 4,413
IAG 1st Quarter Results
https://www.iairgroup.com/~/media/Fi...031%202020.pdf
A few headlines:
- 2020 Capex cut by $1.2b
- Currently planning meaningful return to service in July
- Don't see demand recovering to 2019 levels until 2023
- Accessing UK CCFF funding
- Air Europa acquisition proceeding but will require price adjustment
- No comment on jobs consultations - process in Spain & Ireland as per law
- 737 MAX LOI unchanged
- Willie Walsh stepping down September at AGM
A few headlines:
- 2020 Capex cut by $1.2b
- Currently planning meaningful return to service in July
- Don't see demand recovering to 2019 levels until 2023
- Accessing UK CCFF funding
- Air Europa acquisition proceeding but will require price adjustment
- No comment on jobs consultations - process in Spain & Ireland as per law
- 737 MAX LOI unchanged
- Willie Walsh stepping down September at AGM
May 7, 2020, 1:49 am
#2
Join Date: Jul 2012
Location: London
Posts: 489
https://www.iairgroup.com/~/media/Fi...031%202020.pdf
A few headlines:
- 2020 Capex cut by $1.2b
- Currently planning meaningful return to service in July
- Don't see demand recovering to 2019 levels until 2023
- Accessing UK CCFF funding
- Air Europa acquisition proceeding but will require price adjustment
- No comment on jobs consultations - process in Spain & Ireland as per law
- 737 MAX LOI unchanged
- Willie Walsh stepping down September at AGM
A few headlines:
- 2020 Capex cut by $1.2b
- Currently planning meaningful return to service in July
- Don't see demand recovering to 2019 levels until 2023
- Accessing UK CCFF funding
- Air Europa acquisition proceeding but will require price adjustment
- No comment on jobs consultations - process in Spain & Ireland as per law
- 737 MAX LOI unchanged
- Willie Walsh stepping down September at AGM
May 7, 2020, 1:54 am
#3
Join Date: Aug 2004
Programs: Meh
Posts: 2,598
Interesting to hear they see meaningful travel return in July, but signs from UK government is that international borders will be last to re-open and talks of 14 day quarantine to be introduced.
So July might be too optimistic, in fact it definitely is.
So July might be too optimistic, in fact it definitely is.
May 7, 2020, 1:57 am
#4
Join Date: Jul 2012
Location: London
Posts: 489
We are planning for a meaningful return to service in July 2020 at the earliest, depending on the easing of lockdowns and travel restrictions around the world
May 7, 2020, 1:58 am
#5
Original Poster
Join Date: Jun 2003
Programs: BA, IHG, 5C
Posts: 4,413
So contrary to popular belief, they have accessed the UK loan scheme. Also currently burning through EUR200m per week, if anyone was in any doubt that sitting on a large cash pile helps them that much...it only buys them a few more months than the other big players who now have government support behind them.
Results webcast at 9am, i.e. now: https://edge.media-server.com/mmc/p/7xws8ap8
May 7, 2020, 2:17 am
#6
Join Date: Jun 2015
Location: LHR, LGW
Programs: BAEC
Posts: 3,439
However, IAG - which also owns Iberia and Aer Lingus - said these plans were "highly uncertain", and were subject to various travel restrictions.
May 7, 2020, 2:32 am
#7
Join Date: Oct 2015
Posts: 116
https://www.iairgroup.com/~/media/Fi...031%202020.pdf
A few headlines:
- Currently planning meaningful return to service in July
- Don't see demand recovering to 2019 levels until 2023
- AGM
A few headlines:
- Currently planning meaningful return to service in July
- Don't see demand recovering to 2019 levels until 2023
- AGM
May 7, 2020, 3:43 am
#8
Join Date: Sep 2013
Programs: BAEC Gold, EK Skywards (enhanced Blue !), Oman Air Sindbad Gold
Posts: 6,399
Given the sheer scale of BA operations, and its global reach, the latest 1st Qtr results statements have - not surprisingly - attracted much interest and comment from financial analysts,
This from Bloomberg ...........
(Bloomberg) -- British Airways parent IAG SA tapped U.K. government-backed loans to boost liquidity, in a sign of the damage wrought by the coronavirus on even the industry’s strongest players.
IAG accessed 300 million pounds ($371 million) from the Coronavirus Corporate Finance Facility in the second week of April, it said Thursday, taking state-supported funding to $1.45 billion including Spanish backing. The group, which initially signaled it wasn’t seeking aid, said it’s essentially grounded until July, when it’ll start restoring flights.
and
Walsh initially said IAG wasn’t applying for bailouts and earlier in the year opposed a proposal to help now-defunct Flybe, one of the virus’s first airline victims. He said in March he thought airlines should be expected to “look at self-help before they would call on governments to provide state aid.”
This from Bloomberg ...........
(Bloomberg) -- British Airways parent IAG SA tapped U.K. government-backed loans to boost liquidity, in a sign of the damage wrought by the coronavirus on even the industry’s strongest players.
IAG accessed 300 million pounds ($371 million) from the Coronavirus Corporate Finance Facility in the second week of April, it said Thursday, taking state-supported funding to $1.45 billion including Spanish backing. The group, which initially signaled it wasn’t seeking aid, said it’s essentially grounded until July, when it’ll start restoring flights.
and
Walsh initially said IAG wasn’t applying for bailouts and earlier in the year opposed a proposal to help now-defunct Flybe, one of the virus’s first airline victims. He said in March he thought airlines should be expected to “look at self-help before they would call on governments to provide state aid.”
May 7, 2020, 4:25 am
#10
Join Date: Mar 2016
Programs: BAEC, Ib+, Accor, HHonors
Posts: 609
May 7, 2020, 4:26 am
#11
Join Date: May 2007
Programs: BA Blue, EI Silver, Honours Gold, Marriott Gold
Posts: 1,209
I suppose the question is where the line between applying for government-backed funding and publicly soliciting a bail-out of a private entity lies. IAG drew down government underwritten loans, it has not taken directly from the tax payer. The SRB/Virgin pleas was for a £500 million pound loan on commercial terms, but provided by HMG. To me IAG is being opportunistic and opaque with the finer details to pursue an agenda. They are clearly trying to weaken the competition and reduce their own cost base. The optics on this aren't great and does make them look two-faced. But it is a fight for survival right now and the IAG strategy is to be the last man standing. There are a lot of bad options here.
May 7, 2020, 4:37 am
#12
FlyerTalk Evangelist
Join Date: Feb 2004
Location: London
Programs: BA, VS, HH, IHG, MB, MR
Posts: 26,871
I suppose the question is where the line between applying for government-backed funding and publicly soliciting a bail-out of a private entity lies. IAG drew down government underwritten loans, it has not taken directly from the tax payer. The SRB/Virgin pleas was for a £500 million pound loan on commercial terms, but provided by HMG. To me IAG is being opportunistic and opaque with the finer details to pursue an agenda. They are clearly trying to weaken the competition and reduce their own cost base. The optics on this aren't great and does make them look two-faced. But it is a fight for survival right now and the IAG strategy is to be the last man standing. There are a lot of bad options here.
May 7, 2020, 5:26 am
#13
Join Date: Dec 2009
Location: Flatland
Programs: AA Lifetime Gold 1MM, BA Gold, UA Peon
Posts: 6,111
There's a strong argument that IAG did "look at self-help before they would call on governments to provide state aid" and is spending much of its own cash reserves as well as having the government buy bonds.
How senior is the HM Government debt? If HM Government has first call on BA's assets if the company fails, they would be in a good position to recoup £300m from the capital assets of the airline.
How senior is the HM Government debt? If HM Government has first call on BA's assets if the company fails, they would be in a good position to recoup £300m from the capital assets of the airline.
May 7, 2020, 5:36 am
#14
Join Date: May 2007
Programs: BA Blue, EI Silver, Honours Gold, Marriott Gold
Posts: 1,209
The counter argument is that the IAG group has taken 1.5 billion Euro in government loans, both other European groups have taken 10billion each. Which is better for the taxpayer in the medium term?
May 7, 2020, 5:50 am
#15
Original Poster
Join Date: Jun 2003
Programs: BA, IHG, 5C
Posts: 4,413
The £300m will only come from your pocket if BA defaults, in the sense that the taxpayer would have to repay the borrowings or forever pay interest on. And that’s exactly what the picture would look like with a guarantee that got called upon.