lost_in_translation

Surprise surprise, ‘things are even worse that we said they’d be’ - https://www.iairgroup.com/en/newsroo...uarter-results

- Q3 revenue down 83% on 2019; RPKs down 88%(!), clearly cargo is stopping a complete and utter collapse in revenue
- Bookings not developed as expected, now only expect a capacity recovery in Q4 to a maximum of 30% of 2019 (i.e. will be cutting at least 25% of the Q4 capacity they previously expected to have)
- Will continue to burn cash rather than cash flow break even in Q4 instead (doesn’t sound positive for the chance of anything cut returning to normal soon)

drwook

Yet still the stock price is ~+50% since 1 August; perhaps some people with deep pockets know something we don't.

orbitmic

It will also be interesting to keep an eye on how the IAG figures compare to AFKL and LH Group. Based on airports, my sense is that London and Madrid are even worse hit than most other European hubs (indeed LHR has slipped several places in the list of European airports it used to top). What is left is to see if it is replicated in terms of airline results.

Bohinjska Bistrica

I know BA isn't IAG, bit the effective ban* on Europeans entering the US probably means IAG is going to be very badly hit compared with others given how focused BA is on that market.

I know it's not an outright ban, but the particulars of it achieve this result in the vast majority of cases.

13901

It’s clearly a bad situation for IAG. Latin America, where IB makes the most of its cash, is either on deep lockdown or in deep manure due to local (cough cough Bolsonaro) incompetence.

The US, thanks to the Orange in Chief, isn’t faring any better either and that has an effect on BA as known.

Then, icing on the cake, we have the power trio Priti-Grant-BoJo and the 14-day quarantine that has all but decimated travel, with LHR 4th largest European airport for the 8 months to 2020.

This, too, shall pass but I’m worried for the long term relevance of London as a hub; this, Brexit and restrictive visa policies will cause damages. Especially if, in future, Europeans will need to get ESTA-like permits at a cost.

lost_in_translation

I do agree with this, but I would point out that the more Asia-focused long-haul competition isn't exactly fairing much better since a lot of Asia has taken the approach of hermetically sealing their borders. It's not only travel to the Americas that is severely disrupted. It's only really the intra-Europe airlines like Ryanair / EasyJet that have had even a chance of making a material amount of revenue and even that is now unraveling as i) the summer travel season ends and ii) European countries reintroduce quarantine policies / restrictions on mass.

13901

It goes without saying that right now it's not a question of "who's making money and who's losing it"; it's a question of who's bleeding less.

It's soon to say from an airline point of view, but if you look at pure passenger numbers there are indications that AMS, CDG, FRA are doing better than LHR. MXP, too, has recovered more than LHR vs last year (though the numbers are still cringeworthy). Robert Boyle, whose blog I recommended time and again here and that I'm recommending again, has a good point when it looks at CDG: longhaul traffic there is being pushed by the strong links with the DOM-TOMs, which are at 60% of last year in terms of passenger levels. That and the situation with FRA & MUC points to the fact that where there are little (or clear, manageable) entry hoops passenger actually are there. Maybe not in huge numbers but surely more than now.

As the KLM CEO, again quoted by Robert, said, "people aren't afraid to fly; they are afraid to arrive". The higher the level of muppetry by local governments, the lower the flying and, unfortunately, IAG is big in all of the markets where muppetry is at its highest.

Irreverent Medusa

I had bookings from LCY but BA have cancelled every single one, up to and including my ZRH flights in January. And then they complain people aren't flying 🙄

tobsw

Thumbs up here for Robert Boyle's blog. It's one of the best written commercial aviation analysis blogs you will find. Very intuitive, didactic and clear - sometimes it requires more than one read to get the bigger picture, but if you are interested in commercial aviation, this is the blog you should read and frequent regularly.

13901

And as if on cue, Robert has published a quick review of how LH and IAG have performed so far.

https://www.gridpoint.consulting/blo...d-better-in-q3