IAG(US:ICAGY)2020-08-02 17:40Financial Data and Key Metrics Changes - The company reported a pre-exceptional operating loss of €1.9 billion for the first half of the year, with a Q2 loss of €1.365 billion and a Q1 loss of €535 million [8][28]. - Passenger revenue decreased by 96.7% to €198 million in Q2, consistent with a 95% reduction in available seat kilometers (ASK) [27]. - Overall revenue was down 89% due to the pandemic's impact [27]. - Costs were reduced by approximately 63.5%, but the company still faced significant losses [28]. Business Line Data and Key Metrics Changes - Cargo revenue reached a record level despite a 37.5% drop in volumes, indicating a strong performance in that segment [27]. - The company is restructuring its cost base and has implemented measures to reduce fixed costs and capacity [39][40]. Market Data and Key Metrics Changes - The company anticipates that passenger demand will not return to 2019 levels until at least 2023 or 2024 [9]. - Domestic Spain has shown the strongest recovery, with bookings currently at 50% of last year's levels, while international long-haul bookings remain weak at around 20% [61][64]. Company Strategy and Development Direction - The company plans a capital increase of up to €2.75 billion to strengthen its financial position and reduce leverage [10][79]. - There is a focus on maintaining a competitive cost structure and improving innovation capabilities to adapt to changing market conditions [55]. - The company is committed to environmental sustainability, aiming for net-zero emissions by 2050 [22][21]. Management's Comments on Operating Environment and Future Outlook - Management acknowledges the unprecedented challenges posed by COVID-19 and emphasizes the need for restructuring to align with reduced demand [7][92]. - The company is optimistic about returning to cash flow positivity by the end of 2020, depending on various factors related to COVID-19 and customer behavior [68][92]. Other Important Information - The company has a strong liquidity position, with cash at €6 billion, representing 24% of 2019 revenues [35]. - The company is actively managing its fleet and has impaired several aircraft, leading to significant charges [32][34]. Q&A Session Summary Question: Capacity expectations across various airlines in the second half - Management indicated that capacity will vary by airline, with domestic markets expected to recover first, followed by short-haul and long-haul international flights [96][97]. Question: Impact of support programs ending on cash burn - Management noted that restructuring measures are in place to replace temporary income support schemes as they unwind [104]. Question: Aircraft leasing strategy moving forward - The company plans to maintain its principles regarding aircraft financing, but the current market conditions will influence future decisions [105]. Question: Business demand recovery expectations - Management expects leisure travel to recover faster than business travel, with structural changes anticipated in the business market [106].