Airline group IAG predicts return to 85% of pre-Covid capacity this year

Quantum Commodity Intelligence - Airline group IAG predicted its capacity will return to 85% of 2019 levels this year supported by "robust" summer bookings, up from an average of just 36% in 2021.

The company's passenger capacity in Q4 last year averaged 58% of 2019 levels, up from 43% in Q3, but the emergence of Omicron slowed down recovery in bookings after an initial spike when the US reopened its borders, the company said in annual results Friday.

Aviation agency OAG also reported earlier this week that airlines for the first time since the start of the pandemic have added more passenger seats for sale for the following three months than they had cut, as confidence grows across the industry.

"Demand slowed down for very near-term trips following the emergence of Omicron in late November. However, bookings have remained strong for Easter and summer 2022 having picked up in the New Year," said Luis Gallego, IAG's Chief Executive Officer.

IAG operates 533 aircraft across 5 major carrier brands, including British Airways, Iberia and Vueling, and carried around 118 million passengers per year prior to the pandemic.

The company ran at an operating loss of €2.765 billion ($3.11 billion) last year, up from a loss of €6.935 billion in 2020 as costs were slashed, with passenger revenues gaining only 6% to €5.835 billion over the same period.

The company is expecting to continue running at a loss in Q1 this year due to normal seasonality, the impact of Omicron on near-term bookings and the impact on operating costs of re-building capacity, before returning to profit from Q2.