International Airlines Group plans to cut capacity by at least 75 per cent in April and May as the company battles the coronavirus pandemic around the world.
The group – which operates British Airways, Iberia and Aer Lingus – said it was also taking drastic actions to reduce operating expenses and improve cash flow.
These include grounding surplus aircraft, reducing and deferring capital spending, cutting non-essential and non-cyber related IT spend and freezing recruitment.
At the same time, IAG is implementing voluntary leave options, temporarily suspending employment contracts and reducing working hours.
In light of the exceptional circumstances facing the aviation industry due to Covid-19, and in particular the developing situation in Spain, it has been decided that Luis Gallego will continue in his role as Iberia chief executive for the next few months to lead the response in Spain.
In the meantime, Willie Walsh, who had been due to this month, will continue to act as group chief executive.
Javier Sanchez will remain in place as Vueling chief executive.
Walsh said: “We have seen a substantial decline in bookings across our airlines and global network over the past few weeks and we expect demand to remain weak until well into the summer.
“We are therefore making significant reductions to our flying schedules.
“We will continue to monitor demand levels and we have the flexibility to make further cuts if necessary.
“We are also taking actions to reduce operating expenses and improve cash flow at each of our airlines.
“IAG is resilient with a strong balance sheet and substantial cash liquidity.”
The group – which saw its share price dip a further 20 per cent this morning – said it had a “strong liquidity” position, with cash, cash equivalents and interest-bearing deposits of €7.35 billion as at March 12th.
In addition, undrawn general and committed aircraft backed financing facilities amount to €1.9 billion, resulting in total liquidity of €9.3 billion.
To date, IAG has suspended flights to China, reduced capacity on Asian routes, cancelled all flights to, from and within Italy and made various changes to our network.
The US presidential announcement to restrict entry of foreign nationals who have been in countries in the Schengen Area, the UK and Ireland has added to the uncertainty on North Atlantic routes, IAG said.
In addition, many other countries have banned or are restricting inward travel including Argentina, Chile, India and Peru.
Spain has also been the subject of travel advisories, for example by the UK Foreign & Commonwealth Office.
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