IAG International Airlines Group will implement further fleet reduction plans, including the aircraft deferrals and the retirement of British Airways' sole A318-100.
The Spain-based holding said in its quarterly earnings release that it has deferred deliveries of 68 aircraft initially scheduled between 2020 and 2022, although it did not disclose the types that had been affected or their new timelines. IAG said the deferrals would contribute to the halving of capital expenditures planned through the end of 2022, which now stand at EUR7.3 billion euros (USD8.6 billion), down from EUR14.3 billion (USD16.8 billion). The group has committed fleet financing of EUR1.5 billion (USD1.8 billion) through the end of 2020 and, even after the cuts, plans to add 75 new aircraft by the end of 2022, including 35 short-haul and 40 long-haul aircraft.
"It's difficult to be too categoric as to how we're going to finance the aircraft deliveries in 2021, 2022 because we need to see how the markets open," Chief Financial Officer Steve Gunning said.
According to the ch-aviation fleets module, the group has firm orders from the manufacturers for twenty-nine A320-200Ns, thirty-seven A321-200Ns, sixteen A350-900s, twelve A350-1000s, eighteen B777-9s, and ten B787-10s split between British Airways, Iberia, Aer Lingus, and Vueling Airlines.
IAG said it maintained plans to return 20 dry-leased aircraft in 2020 and had the "flexibility" to return a total of 96 aircraft (including 88 short-haul units) in 2021 and 2022.
The holding confirmed that on top of the early retirement of British Airways' B747-400 fleet and Iberia's A340-600s, it would also phase-out the UK carrier's last A318. British Airways had used the 11-year-old narrowbody, configured in an all-business-class seating for 32 passengers, on its London City-New York JFK service (via Shannon on the outbound leg). G-EUNA (msn 4007) operated its last revenue flight on March 17 and was ferried to Madrid Barajas for storage on March 20, Flightradar24 ADS-B data shows. The unit is owned by British Airways.
Other fleet measures announced by the group include:
- at British Airways, the temporary grounding of four A380-800s and up to six B777s, the early retirement of 13 and temporary grounding of 18 Airbus narrowbody aircraft,
- the unspecified "rightsizing" of BA CityFlyer (CJ, London City) reflecting lower business travel demand,
- the temporary grounding of two widebodies and seventeen narrowbodies operated by Iberia,
- the transfer of two A320-200s and four A321-200s from bankrupt LEVEL Europe (Vienna) to Vueling, as well as downsizing LEVEL's fleet of widebodies from seven to two A330-200s, reflecting the planned closure of OpenSkies (BOS, Paris Orly),
- at Aer Lingus, the temporary grounding of six A320s and three A330s, but also the deliveries of six A321-200NX(LR)s.
IAG, which has vowed to avoid any state aid, has also revealed a plan to raise an additional EUR2.75 billion (USD3.2 billion) through a rights issue.
"I'm pleased to say in regards to the rights issue that Qatar Airways Group, our largest shareholder with a 25.1% [stake], has irrevocably committed to support the capital increase. And for the remaining 74.9%, we have fully underwritten the capital raise on a standby basis," Gunning said.
The holding will seek the approval of its shareholders for the capital raise on September 8, 2020.
Qatar Airways said that while it supported the decision, it would request two additional non-executive seats on the board of directors of the holding. Despite owning 25% of the shares, it currently has no representative in the board.
"I don't think it signals anything other than Qatar's support for our business and their desire to see the strength and depth of the Board members of IAG enhanced by the representatives that they put forward," outgoing Chief Executive Willie Walsh said.
In a separate development, British Air Line Pilots' Association (BALPA) said that its members had overwhelmingly approved a new collective labour agreement with British Airways, which foresees the elimination of 270 pilot jobs and pay cuts of 20%, gradually decreasing to 8% over two years and then to zero going forward.