IAG expects to return to profit this year. This was confirmed by Luis Gallego, CEO of IAG, during the elEconomista.es Agora held this Monday. In this sense, and when asked about the acquisition of Air Europa, Gallego has been convinced of moving forward to obtain 100% of the capital of the Spanish airline but has expressed his doubts about its success. “Our intention is to continue to have 100%, it is not to have a financial position, but it cannot be done anyway,” he said. In this sense, he pointed to a plan B to continue growing if the acquisition of Air Europa fails. “If it can’t be done, we have another strategy to see how we grow in the region,” he admitted, refusing to reveal it for now.
Gallego wanted to remind that IAG is now “in a process of talking with the company”, in reference to Air Europa, in which in addition to talking about the price, which in this new attempt is not set, “not only does the situation of the company, also the synergies”.
Regarding the results of this exercise, Gallego recalled that despite the fact that the first half of the year the numbers are still negative, “we are confident that the year is going to be positive and we are going to make money and have cash.” In this sense, he recalled that the biggest challenge that the group now faces is to generate cash to pay the debt and continue investing in new aircraft and the well-being of the group, although it points positively for all the group’s airlines.
This situation will be possible thanks to, among other things, the fuel hedges that mitigate the impact of the price of fuel for a period of time. “Then you take the impact,” he acknowledged, while recalling that it is a problem that affects the entire sector. “We compete in the North Atlantic with large American airlines that do not have coverage and have to pass on the costs in the price, we can avoid it for a while,” he pointed out.
Contribution to tourism and GDP
During his opening speech, Luis Gallego, CEO of IAG, insisted on IAG’s commitment to sustainability and to the development of Madrid as a new European hub capable of climbing the ranks among the main European airports. “IAG generates directly, indirectly and induced more than 9,300 million euros to the Spanish GDP, 0.6%, for the millions of tourists who fly with the airline (…) There are 160,000 jobs, 0.9% of jobs in Spain. These are figures that speak for themselves,” said Gallego during his speech.
Sustainability
The CEO of IAG emphasized the need for Spain to speed up the ecological transition, more so now hand in hand with funds backed by the European Union. “Aviation is responsible for 2.2% of global emissions. Decarbonizing the sector will not be easy, but it is also an opportunity to reduce the carbon footprint. In this sense, we were the first group of airlines in the world to commit to achieve net zero emissions by 2050”. In addition, IAG “is going to replace up to 140 aircraft in the next five years” and has a clear commitment to the use of sustainable fuel SAF (for its acronym in English).
“We need to transform the economic model of Spain to adapt it to environmental challenges. We are presented with the historic opportunity to change course and forge a future,” according to Gallego. “We think that it is feasible for 60% of the fuel to be sustainable by 2050, but for this we need to accelerate global production, including our agreements with Repsol and Cepsa. We think that it is necessary to build 30 plants in Europe in the next eight years”, maintains the CEO of IAG, in which Spain could play a key role. The top manager of the holding company wanted to recall how the British Government has provided funds for some 190 million euros to build five SAF plants from 2025. “Spain has the opportunity to be at the same level. Why can’t we also be leaders in sustainable fuel for aviation? Spain could develop an ecological activity and, at the same time, create jobs (…) At IAG our commitment to Spain is inalienable”.
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