"All IAG airlines made substantial losses," said Chief Executive Willie Walsh, noting that second-quarter traffic collapsed by a staggering 98.4% as a result of government travel restrictions - and capacity shrank 95.3%.

"We have seen evidence that demand recovers when government restrictions are lifted," he said, adding that IAG had taken extra measures to reassure customers about health and safety.

But Walsh said "we continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels."

The International Air Transport Association had warned earlier this week that global air traffic will not return to levels seen before the coronavirus pandemic until at least 2024, adding that new UK restrictions on travel with Spain had created a lot of uncertainty.

British Airways had already warned in April that it could slash up to 12 000 jobs, or a quarter of its workforce, in a drastic restructuring as the carrier grapples with fallout from the deadly pandemic.

Britain's BALPA pilots' trade union is meanwhile consulting members over a provisional agreement with BA over plans to cut wages by 20% and potentially shed about 270 jobs. The ballot closes on Friday.

'Darkest hour'

In late morning deals on Friday, IAG's share price tumbled 9.3% to 164.21 pence as many investors took flight on the grim set of news.

London's FTSE 100 index, on which the group is listed, flatlined at 5 987.62 points.

"Who will back International Consolidated Airlines in its darkest hour?" asked AJ Bell investment director Russ Mould.

"The airline sector is in desperate need of cash to help see it through a very difficult period and investors will be taking considerable risk by participating in its rights issue."

While Mould said cash injection will give IAG a bit of breathing space, the pace of the airline sector recovery is out of its hands.

"It is dependent on the course of coronavirus and government decisions on travel restrictions, quarantines and lockdowns in case of new flare-ups."