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BA owner's shares slide despite cutting loss to €2bn

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BA planes
BA planes

British Airways is adding more flights to its schedule as its owner reports a €2bn (£1.7bn) loss for the first six months of the year.

IAG's operating loss is half the sum for the same period last year, but shares still fell almost 7pc to 169p on concerns about further travel restrictions being imposed by the Government.

It was the biggest faller on the FTSE 100 on Friday, but the stock remained well above the 123p level of this time last year.

BA plans to operate about 45pc of passenger capacity between July and September compared with the same period in 2019 - and more than a fifth above the level for the three months to the end of June.

Luis Gallego, IAG's chief executive, said it was "ready to fly as much as 75pc of 2019 capacity" in the last quarter of the year.

However, he warned that plans remained uncertain and subject to review: "We know that recovery will be uneven, but we're ready to take advantage of a surge in air travel demand in line with increasing vaccination rates."

Mr Gallego said: "Our focus is on ensuring our operational readiness, so we have the flexibility to capitalise on an environment where there's evidence of widespread pent-up demand when travel restrictions are lifted."

The owner of airlines including Iberia and Aer Lingus also welcomed the lifting of quarantine restrictions on passengers arriving from the EU and United States.

Mr Gallego said BA recorded a 95pc increase in the number of bookings for flights from the US shortly after Wednesday's announcement on easing travel rules compared with the same period last week.

The US has kept its borders closed to British and European visitors and is not expected to ease them anytime soon. Washington last week advised its citizens to avoid going the the UK, citing the spread of the delta variant.

Daniel Roeska, an analyst at Sanford C. Bernstein, said “further US reopening remains the most important catalyst” for IAG. BA is dependent on the lucrative London to New York route for much of its profits.

The IAG boss also called for the furlough scheme to be extended past its September cut-off until the end of the year but said the airline was not considering more job cuts.

"With the plans that we have right now, our plan is to fly, people want to fly, and for that we're going to need our people," Mr Gallego said.

In April last year BA announced plans to cut up to 12,000 jobs in response to the virus crisis.

Separately, Air France-KLM said losses narrowed to €1.5bn in the three months to June, down from €2.6bn in the same period last year as some travel restrictions eased. The airline has lost more than €10bn since the start of the pandemic.

The chief executive, Benjamin Smith, said: "Reciprocity of borders reopening and the acceleration of the vaccination rollout worldwide, especially in the context of the rise of the delta variant, will play a key role in maintaining this momentum."

Second-quarter revenues more than doubled to €2.75bn as passenger numbers soared to 5.8m, up from 1.1m.

Mr Roeska said Air France-KLM’s recovery was ahead of expectations, with occupancy levels “looking quite respectable”.

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