British Airways owner IAG will cut more flights over the coming months than it had previously planned as the recovery in international air travel from the coronavirus pandemic stalls.
In an operations update, IAG said that it would now fly at 40 per cent capacity through the autumn, down from past estimates of 54 per cent.
It also reduced its forecast for next year, with capacity now expected to decline 27 per cent, slightly lower the 24 per cent fall previously forecast.
IAG’s shares sank on the announcement, falling 2.3 per cent in the morning’s trading, even as it announced a €2.7bn capital raise.
In recent days both Ryanair and Easyjet have also announced a reduction in capacity, which they said was necessary due to the government’s quarantine regime.
Since the travel corridor policy was implemented in July, a number of the most popular holiday destinations for Brits have been put back under quarantine restrictions, including France and Spain.
The lucrative transatlantic market, to which BA is especially exposed, remains largely shut, although there have been reports that ministers are discussing a London to New York “air bridge” with their US counterparts.
The update comes as Luis Gallego takes the helm at IAG, with longtime chief executive Willie Walsh stepping down.
“Since July, IAG has experienced an overall levelling off of bookings”, the group said in a statement.
“Short-haul bookings have fallen slightly following the re-implementation of quarantine requirements by the UK and other European governments for travellers returning from specific countries including Spain.
“As anticipated, IAG has seen a delayed recovery of long-haul booking activity, impacted by the continued existence of travel restrictions to many long-haul destinations, including North and South America. Long-haul bookings have seen a modest increase since mid-August.”
It added that it maintained its forecast that air travel would not return to pre-pandemic levels until 2023.