British Airways owner IAG is cutting more flights over the next three months as it adjusts to the continuing collapse in demand for air travel.

IAG, which also runs Aer Lingus and Iberia, said quarantine restrictions meant capacity this autumn would be 60% below 2019 levels.

The group said it had seen a "delayed recovery", and did not expect business to return to 2019 levels until 2023.

IAG also said BA had reached the outline of a jobs agreement with Unite.

The union has been in a bitter dispute with BA over redundancies and pay cuts for cabin crew. BA has already reached a separate deal with pilots.

The airline, which is aiming to shed up to 13,000 jobs, said that by the end of August some 8,236 employees had left the business, "mostly as a result of voluntary redundancy".

Unite stressed its cabin crew members still needed to approve the plan through a ballot and that negotiations remained ongoing.

"Unless and until Unite members agree to all and any proposals, no settlement has been reached and it is unhelpful and misleading for British Airways to suggest otherwise," said assistant general secretary Howard Beckett.
Bookings slow

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

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It said it had seen an "almost complete cessation of new booking activity" in April and May due to the pandemic, but the easing of country lockdowns boosted ticket sales in June.

However, since July there had been an "overall levelling off in bookings" as the UK and other European countries re-imposed quarantine requirements for travellers returning from countries such as Spain.

On Tuesday, EasyJet revealed it will have flown "slightly less" than the 40% of pre-coronavirus pandemic capacity it previously said it would operate between July and September following the government's decision to impose quarantine restrictions for seven Greek islands.
Boris Johnson appeal

Airlines are among the firms hardest hit by the impact of the pandemic. British Airways plans to cut up to 13,000 jobs due to the crisis, while EasyJet and Virgin Atlantic are slashing 4,500 roles each.

Operators say the UK's travel quarantine policy - which requires visitors to high risk countries to isolate on their return - is crushing demand and want the government to back testing at airports instead.

UK government sources have indicated that they are looking at system where the two tests would be eight days apart to further minimise the risk of "false negative" results.

They are yet to approve the idea, however, while the prime minister last week warned testing at airports could give a "false sense of security".

In a joint letter to Prime Minister Boris Johnson on Thursday, Airlines UK, whose members include BA, Virgin, Ryanair and EasyJet, called for an extensions of the jobs furlough scheme and air passenger duty waiver.

"Our industry is in crisis," the letter said. "In sum, we ask you to act urgently to implement a programme of recovery for our sector."
Raising money

IAG also announced on Thursday that it was tapping shareholders for €2.7bn (£2.5bn) to help shore up its finances.

The company said the money would be used to reduce debt and help it withstand a prolonged downturn in travel.

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

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

Details of the rights issue, which was announced in July, come two days after new chief executive Luis Gallego took over from long-time boss Willie Walsh.