The owner of British Airways, International Airlines Group, more than halved losses to €3.5bn in 2021 and expects to return to profit this year as long as operations are not significantly disrupted by Covid-19 or the invasion of Ukraine.
The company, which made a record €7.4bn (£6.4bn) loss in 2020, said that passenger levels were still only 36% of pre-Covid levels last year.
The company said that the impact of Omicron on traveller confidence has hit bookings in January and February, meaning it will make a “significant” loss in the first quarter. Passenger capacity is expected to be at 65% of pre-pandemic levels in the first three months of the year.
However, it expects to return to profit in the second quarter, driven by an increase in bookings for Easter and summer that will underpin “significantly positive” operating profit and cashflows for 2022. Capacity is expected to hit 85% of pre-pandemic levels across the year.
“This assumes no further setbacks related to Covid-19 and government-imposed travel restrictions or material impact from recent geopolitical developments,” the company said.
Luis Gallego, IAG’s chief executive, said the company is “monitoring events closely to manage any potential impact”.
He said: “We are confident that a strong recovery is under way. We expect a robust summer with IAG returning to around 85% of its 2019 capacity for the full year. Our model enables us to capture revenue and cost synergies while maximising efficiencies, which means we are set up to return to profitability in 2022.”