British Airways owner I.A.G.

British Airways owner I.A.G.

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Reuters

IAG, the owner of British Airways, is cutting more flights over the next three months as it adjusts to a steady decline in demand for air travel.

The IAG, which also operates the Georgians and Iberia, said the quarantine ban means it will be 60% below the 2019 level this fall.

The group said it has seen a “delayed recovery”, and does not expect business to return to 2019 levels by 2023.

The IAGA also said that BA has reached the outline of a job agreement with United.

The union has been in bitter dispute with BA over redundancies and pay cuts.

The airline, which aims to create 1,000,000 jobs, said about 666 employees had left the business by the end of August, “mostly as a result of voluntary redundancy”.

United stressed that its members need to approve the plan by ballot and that negotiations are ongoing.

“No compromise has been reached until and until the United States members agree on all and any of the proposals, and it would be helpless and misleading to suggest otherwise to British Airways,” said Assistant Secretary General Howard Beckett.

Booking slow

The IAG’s decision to cut more flights than planned follows its forecast of a 46% reduction during the October-December period compared to the same quarter of the previous year.

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It said the epidemic had seen “almost complete cessation of new booking activity” in April and May, but ease of lockdown in the country had boosted ticket sales in June.

However, since July the UK and other European countries have reintroduced quarantine requirements for returning travelers from countries such as Spain, which has been “closed at an overall level in bookings”.

On Tuesday, EasyJet announced it would have flown “slightly less” than 40% of the pre-coronavirus epidemic, previously saying it would operate between July and September following the government’s decision to impose a quarantine ban on seven Greek islands.

Boris Johnson appeals

Airlines are among the companies most affected by the epidemic. British Airways plans to cut 13,000 jobs due to the crisis, while EasyJet and Virgin Atlantic will cut 4,500.

Operators say the UK’s travel quarantine policy – which requires visitors from high-risk countries to be segregated in order to return – is crushing demand and instead wants the government to support testing at airports.

UK government sources have indicated that they are looking at a system where the two tests will be in addition to eight days to reduce the risk of “false negative” results.

They have yet to approve the idea, however, as the prime minister warned last week that testing at airports could lead to a false sense of security.

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PA Media

In a joint letter to Prime Minister Boris Johnson on Thursday, Airlines UK, whose members include BA, Virgin, Rainier and EasyJet, called for an increase in job furlough plans and air passenger duty waivers.

“Our industry is in crisis,” the letter said. “In addition, we urge you to act urgently to implement a recovery program for our region.”

Raised funds

The IAG also announced on Thursday that it was tapping shareholders for 2. 7 2.7bn (£ 2.5bn) to boost its financial system.

The company said the money would be used to help reduce debt and cope with a prolonged slowdown in travel.

Under the fund, existing investors will buy new shares at a deeply discounted price below the closing price of 36% on Wednesday.

The group’s largest shareholder, Qatar Airways, which has a 25.1% holding, has said it will buy its full rights.

The details of the rights issue, announced in July, come two days after new chief executive Luis Gallego took over as longtime boss Willie Wallace.

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