British Airways owner IAG has said it will take until at least 2023 for passenger levels to recover from the impact of the coronavirus pandemic.
IAG, which also owns Aer Lingus, posted a €4.2bn (£3.8bn) loss in the first half of the year as demand collapsed.
Passenger numbers fell 98% in the April-to-June period, and the group is planning to cut jobs.
IAG said it planned to raise €2.75bn, and had support for this from its main shareholder, Qatar Airways.
However, shares in IAG, which also owns Spain’s Iberia, fell 6% to 170p in early trading on Friday.
BA employs about 45,000 staff and has more than half of these on furlough. It is planning to cut up to 12,000 jobs and is facing the threat of strike action by staff whose jobs are under threat.
However, IAG chief executive Willie Walsh suggested that the job cuts might not be as steep as indicated. He told the BBC: “We are in consultation with the trade unions. We want them to work with us to try to mitigate the measures that we have to take.
“That figure of 12,000 is the maximum that would be required I’m would hope that it will be significantly lower than that.”
Mr Walsh said: “The industry will recover from this crisis, though we do not expect this to be before 2023, and there will be opportunities for IAG to capitalise on its strength and leadership positions.”
He added that business had begun to pick up as guidance on travel abroad was loosened: “We have seen evidence that demand recovers when government restrictions are lifted.”
But he said the industry would never be the same again: “Anyone who believes that this is just a temporary downturn and therefore can be fixed with temporary measures, I’m afraid seriously misjudges what the industry is going through.
“This will represent a structurally changed industry and that’s why we’ve taken the action that we’ve taken and that’s why we believe now the the right time to raise additional capital.”
Mr Walsh said customers with pre-existing bookings were continuing to fly to and from Spain, despite the government’s change to guidance advising against non-essential travel to the country and the re-imposition of quarantine for people returning.
Some IAG airline passengers are still chasing refunds for cancelled flights.
A Civil Aviation Authority review of airlines’ performance on refunds said on Thursday that test calls to BA terminated after a recorded message had played out.
Mr Walsh told the BBC: “It’s important for us to acknowledge we have disappointed people. We’ve not been able to refund people as quickly as we would like.”
He said the company had paid out £1.1bn in refunds and that it aimed to speed up the repayments process so people would receive refunds within seven days of applying. But he said it was a complex process, and much of it had to be done manually.
Julie Palmer, partner at Begbies Traynor, said the results showed the scale of the challenge for IAG: “While the uncertainty continues, IAG will have more difficult decisions to make and it would be no of surprise if the cut of 12,000 BA employees was just the start.
“With mixed messages on international travel, it will be difficult to convince most to start travelling again any time soon. For now, IAG needs to weather the storm and wait for clearer skies if it’s going to stand any chance of recovery.”