IAG, owner of British Airways, said it planned to raise 2.75 billion euros ($A4.5 billion) in a capital increase backed by its biggest shareholder Qatar Airways, to strengthen its finances after the pandemic wiped out travel.
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IAG's chief executive says the capital increase will boost the group's liquidity, which at the end of June stood at 8.1 billion, and put it in the strongest position possible for a market that is unlikely to return to pre-pandemic levels until 2023.
"We strongly believe that now is the time to look to the future and strengthen IAG's financial and strategic position," chief executive Willie Walsh said in a statement on Friday.
With international travel threatened by a new wave of the pandemic before a recovery from the three-month grounding of planes has got properly underway, the outlook for airlines remains bleak.
IAG said the capital boost would also enable it to withstand a more prolonged downturn in its worst-case planning.
The airline group, which also owns Iberia and Aer Lingus, reported an operating loss of 1.365 billion euros for the second quarter, broadly in line with a consensus forecast for a loss of 1.395 billion euros.
Australian Associated Press
