Beautiful Virgin Islands

Monday, Jun 30, 2025

War and oil threaten to overshadow BA owner's pandemic recovery

War and oil threaten to overshadow BA owner's pandemic recovery

British Airways-owner IAG cancelled flights to Moscow and pledged to avoid Russian airspace on Friday as the invasion of Ukraine and surging oil prices threatened its post-pandemic return to profitability.

With passenger numbers edging nearer to 2019 levels, the group which also owns Aer Lingus, Iberia and Vueling vowed to bring an end to two straight years of multi-billion-dollar losses with a return to profitability from the second quarter.

But as it published results it said the British flag carrier had suspended flights to Moscow and would not use Russian airspace, a move that can add significant costs to the industry as diverted planes fly south to avoid areas of tension in the Middle East.

Russia banned British airlines from using its airspace on Friday, a day after London barred Russian flag carrier Aeroflot. Other airlines are avoiding Russia, including Virgin Atlantic, on routes between Europe and Asia.

For BA, the diversions will currently affect around 1% of its operations as the airline is still not flying to many destinations in Asia, including China and Hong Kong.

With oil prices back above $100 a barrel, IAG (ICAG.L) Chief Executive Luis Gallego said the company was hedged against volatile crude prices for two years, with the first year around 60% hedged. He said the conflict in Ukraine could knock general customer confidence, particularly for Americans.

"The point of sale in the U.S. can be affected because the people can be concerned that there is a war in Europe," he said, adding the company had not seen any impact on bookings.

SIGNS OF RECOVERY


The renewed gloom around an industry that has battled two years of travel restrictions that left planes grounded around the world threatened to overshadow the signs of recovery at one of the biggest airline groups.

IAG said on Friday it expected passenger capacity to reach 85% of pre-pandemic levels this year, following a collapse to just 36% in 2021. And while the Omicron coronavirus variant affected bookings in January and February, it had only had a minimal impact on bookings for Easter and summer 2022.

The group reported a 2.97 billion euro ($3.33 billion) net loss in 2021, versus a 4.39 billion euro loss in 2020.

"We are confident that a strong recovery is underway," Gallego said, adding business travel had started to pick up, especially on transatlantic routes.

The group's forecast for a return to profitability assumes no further setbacks related to COVID-19 and travel restrictions or material impact from "recent geopolitical developments."

Shares in IAG are down 19% over the last year. They fell 6% on Thursday after Russia's full invasion of Ukraine forced oil prices to jump back to 2014 levels on fears of supply disruption. They opened up on Friday before sliding back 1%.

IAG, which operates 533 aircraft, has been slower than some of its peers to recover from the pandemic, due to its exposure to the slow-to-open UK market, the long-shut UK-U.S. route and smaller cargo unit.

Passenger capacity in the fourth quarter was 58% of 2019 levels, up from 43% in the third.

($1 = 0.8931 euros)

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
×