The plight facing the owner of British Airways has been laid bare as it posted a €6.2bn (£5.6bn) loss in the first nine months of the year.
Luis Gallego, the new chief executive of IAG, urged governments across Europe to introduce a “reliable and affordable” testing regime to give the FTSE 100 group hope of a recovery.
He said: “These results demonstrate the negative impact of Covid 19 on our business but they’re exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business effectively.”
IAG’s huge loss, equivalent to almost €1m an hour, comes as it prepares for the traditionally leaner winter months. In the corresponding nine months last year, IAG posted a €2.3bn pre-tax profit. Revenues fell from €17bn to €4.8bn.
Mr Gallego, who replaced long-term boss Willie Walsh in September, said: “We are calling on governments to adopt pre-departure testing using reliable and affordable tests with the option of post flight testing to release people from quarantine where they are arriving from countries with high infection rates. This would open routes, stimulate economies and get people travelling with confidence.
“When we open routes, there is pent-up demand for travel. However, we continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels.”
IAG’s results were sullied by a slew of exceptional items relating to coronavirus. “Overhedging” fuel and foreign currency, locking in prices for higher volumes, cost the company €1.6bn.
The company embarked on a cost-cutting exercise earlier this year. About 10,000 jobs have been cut at British Airways in a restructuring that cost IAG €275m.
Mr Gallego, who previously ran BA's sister airline Iberia, refused to be drawn on the prospect of further job cuts. Instead the focus was cutting out unnecessary costs so that the group is better placed to face the pandemic.
"We are trying to have a strong IAG for the future and for that we need to reduce our cost base," he said.
"We don’t know what is going to happen. What we want is a flexible group that can adapt.
"We need to adjust all of our costs. This is not a question of how many people are going to leave the company.
"We need to do what is necessary to survive ... in this life you need to do things that you do not like."
With some experts believing crucial routes to North America will not return to pre-Covid levels until 2026, fears remain over airlines’ cash reserves.
IAG said it had €5bn in cash after raising €2.7bn from shareholders and tapping the Treasury’s Covid Corporate Financing Facility for £300m.
Cargo operations provided a rare bright spot. Revenue rose 11.2pc to €912m. IAG flew additional 1,875 cargo flights in the three months to June and 1,115 to September, when it posted a record return.
Shares closed almost 6pc higher at 94.4p but were above 250p at the start of the year.
Meanwhile, Air France-KLM posted a net loss of €1.7bn (£1.5bn) for the three months to September, compared with a €363m profit in the same period a year earlier.
Revenues tumbled by just over €5bn to €2.5bn as passenger numbers plunged 70pc to 8.8m. The airline expects a "challenging fourth quarter".
Separately, the state of Qatar, IAG's biggest shareholder through government-owned Qatar Airways, apologised for invasive searches of female Australian passengers on flights passing through Hamad international airport earlier this month.
A preliminary investigation found standard procedures were violated in the searches that followed the discovery of a newborn baby abandoned at the airport.
“His Excellency the Prime Minister and Minister of Interior expressed the Government of the State of Qatar’s sincerest apology for what some female travelers went through as a result of the measures,” the Government Communications Office said.
Searches of Australian nationals sparked recriminations from the country’s politicians.