British Airways (BA) and Aer Lingus owner International Consolidated Airlines Group (IAG.L) has said that it hopes to revive flights to 50% of capacity by July.
The group also said in a statement that it it is burning through cash and does not expect to return to full capacity until 2023.
The company said COVID-19 was having a “devastating impact on the global airline and travel sectors, with the spread of the virus worldwide, resulting in lockdowns and travel restrictions and advisories, particularly from late February 2020 onwards.”
At the end of April, IAG confirmed that around 12,000 workers at BA could face redundancy as the airline slashes jobs in a bid to stay afloat during the coronavirus pandemic.
BA’s website says the company employs around 45,000 staff, suggesting the cuts could see a quarter of its entire workforce lose their jobs. It says it employs 16,500 cabin crew and 3,900 pilots, though the latest update did not detail which staff would be affected.
In its results statement on Thursday, IAG said day-to-day cash costs were cut from €440m (£384m, $475m) per week to €200m per week. IAG bosses also reiterated that the firm has a strong balance sheet with €10bn available and they were hoping for a UK government bailout since Spanish authorities gave the business a loan to help out Iberia – a company IAG also owns.
READ MORE: Coronavirus: Airbus CEO warns cost cuts needed as it’s ‘bleeding cash’
The coronavirus pandemic and subsequent travel bans and lockdowns is smashing the airline industry.
The International Air Transport Association (IATA) said that estimated global airline losses from the impact of COVID-19 have risen to $314bn (£253bn). This is 25% more than previously forecasted. This is also due to a 55% drop in 2020 passenger revenue compared with last year.
Recently, the CEO of Airbus (AIR.PA) told employees in a memo that the European planemaker is “bleeding cash” and needs to rapidly cut costs in order to survive the impact from the coronavirus pandemic.
In the memo, Guillaume Faury told the manufacturer’s 135,000 staff to brace for potentially more cuts.
READ MORE: Coronavirus: Pound jumps amid lockdown easing hopes and BOE holds rates
“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,” he said in the memo, cited by media outlets. “We must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny.”
On Thursday, the Bank of England held interest rates at 0.1% but warned that the UK’s gross domestic product (GDP) could shrink by 14% in 2020, noting that there would be a “substantial increase” in unemployment in the first half of 2020 — even beyond those who are already furloughed.
It is for this reason the UK government has been under pressure to deliver a lockdown exit strategy despite being one of the worst countries in the world affected by the pandemic.
Britain became the first country in Europe to record more than 30,000 deaths from coronavirus — counting deaths from hospitals, care homes and the wider community.