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IAG says its operating loss narrowed in the first quarter

International Consolidated Airlines Group SA (LON: IAG) said on Friday the ongoing Coronavirus pandemic continued to weigh on passenger capacity in the first quarter. Despite restrictions, however, its operating loss contracted in Q1.

IAG shares tanked 1% on market open on Friday but recovered the entire intraday loss later on. The stock is now exchanging hands at 207 pence per share. In comparison, it had started the year at a per-share price of a much lower 150 pence per share. Learn more about the capital markets.

IAG’s guidance for passenger capacity in Q2

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In the second quarter, IAG expects passenger capacity to stand at roughly 25% of the levels seen in 2019. The forecast, it added, is uncertain due to the COVID-19 crisis and is subject to review. In its earlier report published in February, the Anglo-Spanish multinational had posted GBP6.0 billion of net loss for 2020.

Compared to 2019, passenger capacity was 19.6% in the first quarter. IAG reported GBP930 million of operating loss in Q1 versus the year-ago figure of a sharply higher GBP1.62 billion. Excluding exceptional items, the owner of British Airways, Vueling, and Iberia recorded GBP990 million of operating loss, compared to GBP464.62 million last year.

IAG generated GBP840.66 million of revenue in Q1. In the same quarter last year, its revenue stood at a significantly higher GBP3.99 billion. The airline holding company refrained from giving its guidance for fiscal 2021 on Friday due to the COVID-19 uncertainty.

In separate news from the United Kingdom, InterContinental Hotels said business improved in Q1 as the Coronavirus-related restrictions started to ease a little.

Chief Executive Luis Gallego’s remarks

CEO Luis Gallego, however, expressed confidence that travel demand will recover in the second half of the year. Gallego said:

“We’re doing everything in our power to emerge in a stronger competitive position. We’re absolutely confident that a safe restart to travel can happen as shown by the scientific data. We’re ready to fly, but government action is needed.”

According to IAG, it agreed a new GBP1.27 billion revolving credit facility (three-year) for Aer Lingus, Iberia, and British Airways. The committed secured facility, it highlighted, remains undrawn.

International Consolidated Airlines Group performed largely downbeat in the stock market last year with an annual decline of more than 60%. At the time of writing, the London-listed firm has a market cap of GBP10.27 billion.