Aer Lingus-owner International Airlines Group (IAG) is counting on digital health passes to help spur a travel recovery this summer, after the pandemic pushed it to a record €7.4 billion loss last year, when it ran just a third of normal flights.
Tighter travel restrictions over the last two months have threatened to ruin Europe's critical summer season and leave some airlines needing more funding, analysts have warned.
But after taking on new loans, IAG said that it has €10.3 billion of liquidity and is well set to ride out the crisis.
"We've got very strong liquidity going into 2021...so no, we will not need additional funding," finance chief Steve Gunning told reporters on a call.
European airlines hope that travel restrictions will soon be eased to allow them to make money again. Last week, Britain laid out plans for travel markets to possibly reopen from mid-May, prompting a flood of bookings.
IAG chief executive Luis Gallego said that if the UK plans goes ahead, it will be a "positive summer", but digital health passes are needed to unlock the market.
"Health passes are going to be the key to restart the aviation and the travel," said Gallego, who is six months into the job, calling for a digital system that could include test results and proof of vaccination.
Several countries are considering health passports to help revive travel, but are worried about risks to civil liberties. However, Britain's Heathrow Airport warned last week that dealing with a big rise in passengers will not be possible with current paper-based checks.
IAG jumped 13% in the last week, after Britain's announcement on a travel restart, but over the last 12 months have lost half their value.
IAG, which also owns British Airways, Iberia and Vueling, said that it cannot give profit guidance for 2021, and when asked how many flights it might run this year, Gallego said, "To be honest nobody knows what's going to happen."
For January-March, IAG said that it expects to fly approximately 20% of 2019's capacity, compared to the whole of 2020 when it flew at 34% of capacity.
IAG's focus for now is on cutting costs to reduce cash burn. Weekly cash burn fell to €185 million in the first quarter, down by €30 million from the previous quarter.
Last October, IAG secured shareholder backing for a €2.74 billion capital hike, and Goodbody analysts said that it might have to call on investors again.
"With further losses expected this year...another rights issue can't be ruled out in the medium term," they said.
Operating Loss Before Exceptional Items
IAG's operating loss before exceptional items, its preferred measure, came in at €4.37 billion, which was slightly better than analysts' consensus forecast for a €4.45 billion loss.