Gallego to head up IAG in September; Group absorbs €1.86bn losses in Q1

By Luke Barras-hill |

Gallego-IAG-portrait-2020

IAG has confirmed that Luis Gallego will succeed Willie Walsh on 24 September.

Willie Walsh will resign as International Airlines Group (IAG) Chief Executive on 24 September at the same time as Iberia Chief Executive Luis Gallego takes up the reins.

As reported, Walsh was due to stand down his position in March ahead of retiring, but that move was curtailed in order to navigate the airline group through Covid-19.

British Airways has already announced it will shed up to 12,000 jobs as a result of the crisis.

In a statement, Antonio Vazquez, Chairman, IAG said: “We announced in March that Willie would delay his retirement for a short period. We can confirm today that Luis Gallego will take over the leadership on 24 September, the expected date for IAG’s AGM, when Willie will step down as CEO.

“We are grateful that Willie delayed his retirement at this challenging time providing the airlines’ management with the necessary stability to focus on the immediate response to the crisis. We look forward to working closely with Luis in his new role.”

PAX RECOVERY ‘NOT EXPECTED UNTIL 2023’

In a first quarter announcement today (7 May), IAG revealed consolidated results for the three months to 31 March were significantly hit due to the global virus impact.

Passenger revenue slid 14.5% to €3.9bn/$4.2bn as operating losses totalled €1.86bn/$2bn. Passenger capacity has reduced by 94% from late March, with most aircraft grounded.

The parent of British Airways, Iberia, Vueling and Aer Lingus says it expects deeper damage in the second quarter and does not expect passenger demand to recover before 2023, necessitating further group-wide restructuring measures.

IAG-Q1-2020

Click to enlarge. Source: IAG.

Walsh commented: “The operating result up to the end of February was in line with a year ago. However, March’s performance was severely affected by government travel restrictions due to the rapid spread of Covid-19 which significantly impacted demand. Most of the loss in the quarter occurred in the last two weeks of March.

Walsh-new-2020

IAG CEO Willie Walsh.

“We had a strong balance sheet and liquidity position coming into this crisis. We are taking all appropriate actions to preserve cash, reduce and defer both capital spending and operating costs and secure additional financing in order to strengthen and maintain our liquidity.

“At the end of April our liquidity stood at €10 billion. We are planning for a meaningful return to service in July 2020 at the earliest, depending on the easing of lockdowns and travel restrictions around the world. We will adapt our operating procedures to ensure our customers and our people are properly protected in this new environment.

“We are working with the various regulatory bodies and are confident that changes in regulations will enable a safe and organised return to service. The industry will adapt to new requirements in the same way that it has adapted to developments in security requirements in the past.

“However, we do not expect passenger demand to recover to the level of 2019 before 2023 at the earliest. This means Group-wide restructuring is essential in order to get through the crisis and preserve an adequate level of liquidity. We intend to come out of the crisis as a stronger Group.”

 

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