Aer Lingus owner International Airlines Group (IAG) has warned that the travel slump from the coronavirus pandemic has deepened, forcing it to axe even more of its winter flying schedule.
The warning came as it reported a quarterly loss of €1.3 billion.
The loss was far larger than the €920 million that was forecast by analysts, as passenger numbers plunged and it struggled to even half-fill its planes.
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IAG, which also operates British Airways, Iberia and Vueling, said that for the fourth quarter, which includes the normally busy Christmas period, it will fly no more than 30% of the capacity that it flew a year earlier, which is lower than previous guidance of 40%.
Shares in the company dropped 3% to 97 pence at 0816 GMT on Thursday October 22. The stock has lost 78% in the year-to-date.
With less flying ahead, IAG warned that it no longer expects to reach breakeven in terms of net cash flow from operations in the fourth quarter, but said that liquidity is strong.
The company has raised €2.74 billion from shareholders via a rights issue and received the funds in early October, raising its total liquidity to €9.3 billion.
Bernstein analyst Daniel Roeska said that even with that buffer IAG needs to focus on reducing costs.
"Management will need to significantly lower monthly cash burn to avoid significantly depleting resources by next summer," he said.
But Goodbody analysts said that total liquidity is positive and IAG will be ready for a recovery in demand next spring.
An Environment Of "High Uncertainty"
IAG said that it is operating in an environment of "high uncertainty", and that it will provide more detailed results on October 30.