British Airways owner IAG calls for action to restart flights

British Airways owner IAG has said it is "ready to fly" and has called for government action to restart international travel.

Citing a "high level" of pent-up demand, the airline group called for "travel corridors without restrictions" between certain countries.

Some foreign holidays could be allowed when England's lockdown rules ease.

Details of a "green list" of countries with the fewest travel rules are expected soon.

Covid impact

The airline group has been hit hard by the coronavirus crisis, with revenue plunging as many of its planes have been grounded.

IAG reported revenues of €968m (£840m) for the first three months of the year, down from €4.6bn for the same period last year, and an operating loss of €1,07bn.

It repeated its call for digital health passes "to enable a safe re-opening of our skies".

There will be some "opening up" of foreign travel on 17 May, Prime Minister Boris Johnson has said.

IAG - which also owns Iberia, Aer Lingus and Vueling - is "doing everything in our power to emerge in a stronger competitive position," said Luis Gallego, IAG chief executive.

"We're absolutely confident that a safe re-start to travel can happen as shown by the scientific data."

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But the aviation industry is anxiously awaiting details of the government's travel traffic light system, which is expected to be announced shortly.

The traffic light system of rules will see countries classed as green, amber or red.

Travellers to green countries will not need to isolate on their return, but they will need to take a Covid test.

Arrivals from amber countries will need to quarantine, while red-list countries have the strictest rules, with only UK or Irish nationals allowed to return and they must pay to stay in a government quarantine hotel.

The airline group called for proportionate Covid tests

"We're ready to fly, but government action is needed through four key measures," said Mr Gallego.

The measures the airline group demanded were:

• Travel corridors without restrictions between countries with successful vaccination rollouts and effective testing such us the UK and the US

• Affordable, simple and proportionate testing to replace quarantine and multi-layered testing

• Well-staffed borders using contactless technology including e-gates to ensure a safe, smooth flow of people and frictionless travel

• Digital passes for testing and vaccination documentation to facilitate international travel.

Meanwhile IAG increased its number of cargo-only flights in the three months to 1,306, up from 969 in the previous quarter.

"Cargo has enabled us to operate a more extensive passenger long-haul network," said Mr Gallego. "It generated €350m in revenue, a record for quarter one."

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that cargo offered "relief" to the airline, but the "pain of lost passenger bookings is severe".

"British Airways owner IAG is still in emergency mode, battening down the hatches as global travel remains in limbo pushing bookings to a fraction of usual levels," she said.

But the airline group "can do little but hold on tight through the continued turbulence and hope government policy will allow it navigate out of the crisis".

"But there are still threatening grey skies ahead, not least with the spiralling of cases in India which could knock confidence in the travelling public," Ms Streeter added.

Richard Hunter, head of markets at Interactive Investor, said the airline sector was "challenging" even in normal circumstances.

"Volatile fuel costs, industrial action, geopolitical tensions, terrorism and the usual economic cycle are all headwinds which the industry faces.

"The pandemic has for some brought an existential crisis. Yet the company is one which has dealt with an impossible situation as best it could," he said.

Intercontinental Hotels Group is another travel industry firm banking on international travel reopening.

The hotel chain reported a 33.7% fall in first quarter revenue per available room compared to the same period last year, and a 50.6% slump compared to 2019.

But chief executive Keith Barr was upbeat about the group's prospects.

He said there "was a notable pick-up in demand in March, particularly in the US and China, which continued into April".

"As the rollout of vaccines becomes more established, travel restrictions lift, and economic activity rebuilds, traveller demand will continue to grow and generate further momentum in an industry recovery over the course of the year," he said.