Shares in Aer Lingus owner IAG soar despite heavy losses and poor outlook

IAG said its third quarter revenue fell by 83% to €1.2bn

Aer Lingus owner IAG has said it has no chance of breaking even in net cash flow terms before the end of the year. File picture: Colin Keegan/Collins Dublin

Shares in Aer Lingus owner IAG jumped by over 4% despite the airline group posting a €1.3bn loss for the third quarter of the year and saying it no longer expects to break even in net cash flow terms before the end of the year.

IAG — which also owns British Airways and Spanish carriers Iberia and Vueling — said its third quarter revenue fell by 83% to €1.2bn.

Revenue for the same period last year amounted to €7.3bn while the group also made a profit of €1.4bn then.

The group said recent overall bookings have not developed as previously expected, due to additional Covid-19 restrictions across Europe.

It said it is now planning for capacity of no more than 30% in the final quarter of the year. The third quarter saw passenger capacity, across its brands, decline by just under 79%, with load factor — which measures the number of seats filled on a plane — of just 49%.

IAG — which is due to publish more detailed financial results for the third quarter next week — said its liquidity levels remain strong, with its recent €2.74bn rights issue boosting liquidity to €9.3bn.

Davy said an easing of quarantine restrictions and an increase in passenger testing will be key to IAG’s financial recovery hopes.

On a good day for airline stocks, both Ryanair and EasyJet saw their shares grow by over 6%.