British Airways dives to £4bn loss as flights reduced by two-thirds
British Airways (BA) fell to a £3.9bn operating loss in 2020, owner IAG revealed today, more than half of the airlines group’s total loss for the year.
According to the FTSE 100 firm’s annual reports, BA’s loss dwarved that of its stablemates Aer Lingus, Iberia and Vueling.
These fell to losses of €563m, €1.4bn, and €880m respectively, adding up to IAG’s total operating loss of $7.1bn, which was announced on Friday.
The loss came on the back of a year in which the carrier saw its flying schedule reduced by two-thirds due to the pandemic.
Despite the enormous loss, IAG’s share price has performed very well in recent days, and rose another 6.9 per cent today.
BA was hit hard by a number of exceptional charges, including €313m for restructuring purposes as it laid off thousands of workers.
Although the cost was spread across the entire group, 10,000 of the 10,500 staff axed by IAG worked for BA. The other 500 were employed by Irish carrier Aer Lingus.
The flag carrier took the decision to cut the jobs – equal to a quarter of its workforce – last summer, predicting a slump in travel demand over the next four to five years and despite the government’s furlough scheme provision.
The decision to so was controversial, and landed BA in hot water with MPs and unions alike, due to attempts to make other workers sign back on to the company on different terms and conditions.
However, back in September new boss Sean Doyle confirmed that the airline had scrapped the “fire and rehire” tactics.
Chancellor Rishi Sunak today announced a six month extension to the furlough scheme, taking it through to the end of September.
BA also had to pay out £22m related to a data breach in 2018.
In addition, it said that it had made nearly 5m refunds to customers due to cancelled flights, 2.8m in the form of cash repayments and 2m in vouchers.
Commenting on the figures, chief executive Sean Doyle said: “Despite a very turbulent year I am confident BA is in the right shape to emerge as a sustainable airline from this crisis.”