IAG’s Profitability Return Outlook

IAG’s Profitability Return Outlook

International Airlines Group (IAG) is a global airline holding company that owns several airlines, including British Airways, Iberia, Aer Lingus, and Vueling. The company has been hit hard by the COVID-19 pandemic, with travel restrictions and lockdowns leading to a significant drop in demand for air travel. However, IAG’s profitability return outlook is positive, with the company taking several measures to reduce costs and increase revenue.

One of the key measures taken by IAG to reduce costs is the restructuring of its operations. The company has announced plans to cut 12,000 jobs across its airlines, with British Airways alone planning to cut 10,000 jobs. This move is expected to save the company around €2.5 billion per year. In addition, IAG has also renegotiated contracts with suppliers and reduced its fleet size to match the reduced demand for air travel.

Another measure taken by IAG to increase revenue is the introduction of new routes and services. The company has announced plans to launch a new low-cost airline, Level, which will operate flights from Barcelona to New York, Los Angeles, and San Francisco. In addition, IAG has also announced plans to launch a new premium economy class on its long-haul flights, which is expected to generate additional revenue.

IAG’s profitability return outlook is also positive due to the expected recovery in demand for air travel. The company has stated that it expects to operate at around 25% of its pre-pandemic capacity in the first quarter of 2021, with a gradual increase in capacity throughout the year. This is in line with the expected recovery in demand for air travel, as more people receive the COVID-19 vaccine and travel restrictions are lifted.

In conclusion, IAG’s profitability return outlook is positive, with the company taking several measures to reduce costs and increase revenue. The restructuring of its operations, the introduction of new routes and services, and the expected recovery in demand for air travel are all factors that are expected to contribute to the company’s profitability in the coming years. While the COVID-19 pandemic has had a significant impact on the airline industry, IAG’s proactive approach to managing the crisis is expected to pay off in the long run.