British Airways and Gatwick back vaccine passports

Simon Foy
·3-min read
BA tailfins
BA tailfins

The owner of British Airways has begged countries to launch a "digital health pass" so borders can reopen and foreign holidays are able to restart after it slumped to a record €7.8bn (£6.8bn) loss.

Luis Gallego, head of BA's parent company IAG, called for immediate action so that his firm can return to the skies.

Meanwhile Gatwick Airport's boss Stewart Wingate said that vaccine passports are "pretty much an inevitability" as his business unveiled a £465m loss for 2020. Travel titan Tui also joined calls for a passport scheme.

The annual loss at IAG - which also owns BA as well as Iberia and Aer Lingus - is the third biggest suffered by a British company during the pandemic. Only oil titans BP and Shell were hit harder, due to a collapse in prices when normal life ground to a halt.

IAG made a €2.3bn profit for 2019. Early fleet retirements, fuel and currency hedges and restructuring costs all contributed to the mammoth 2020 loss, the business said, while passenger revenues fell 76pc to €5.5bn.

The FTSE 100 firm expects passenger capacity in the first quarter of this year to be about a fifth of 2019 levels as travel restrictions continue to choke demand, but said the situation remains uncertain. It did not offer any profit guidance for 2021.

Mr Gallego said that some form of notification showing travellers have had a jab is crucial for flights to restart. He called for "international common testing standards and the introduction of digital health passes to reopen our skies safely".

Meanwhile, Tui boss Fritz Joussen seized on comments by German chancellor Angela Merkel that digital vaccination passports are likely to be available before the summer. He said: "A European vaccination passport can help restore freedom to travel - there is no doubt about that."

After almost a year of deeply depressed demand, the airline industry has pinned its hopes on a rapid inoculation programme spurring a dramatic recovery in air travel in time for the crucial summer season.

British-based carriers breathed a sigh of relief on Monday after the Government laid out plans for travel markets to possibly reopen from mid-May, prompting a flood of bookings.

But much to the chagrin of airline bosses, ministers are still warning that it is too early to book any foreign holidays this year. And for IAG, uncertainty remains over whether any easing of restrictions would include its long-haul routes.

Alexander Paterson, an analyst at Peel Hunt, said: "We anticipate that long haul, to which the group is significantly exposed, will take the longest to recover, and that business travel will not recover fully."

IAG has €10.3bn of spare cash to see it through the rest of the crisis. The carrier secured a government guarantee for a £2bn loan at the end of last year to aid its recovery through UK Export Finance (UKEF), an organisation aimed at helping British firms after Brexit. It also tapped shareholders for £2.5bn in October.

Mr Gallego said: "The aviation industry stands with governments in putting public health at the top of the agenda. Getting people travelling again will require a clear roadmap for unwinding current restrictions when the time is right.

Global Air Travel
Global Air Travel

"We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction. We're calling for international common testing standards and the introduction of digital health passes to reopen our skies safely."

Mr Wingate said: "Despite the immediate challenges I remain optimistic that Gatwick will recover and retain its position as one of Europe’s leading international gateways and an economic driver for the UK’s south east region."

IAG shares closed 3pc higher at 192p.