British Airways owner IAG has finalised a €2.75 billion fund raising backed by largest shareholder Qatar Airways.

The proceeds will help the airline group withstand a more “prolonged downturn” in air travel due the Covid-19 pandemic.

It will also provide IAG with the “operational and strategic flexibility” to take advantage of a recovery in demand for air travel.

There has been no change to the group’s expectation that it will take until at least 2023 for passenger demand to recover to 2019 levels.

The parent company of other airlines such as Aer Lingus, Iberia and Vueling “believes the capital increase, together with its quick response to the crisis, should enable the group to emerge from the current pandemic in a strong position, with more resilience, greater flexibility and the ability to make the right operational and strategic decisions for the long term benefit of all its stakeholders”.

BA is in the process cutting up to 13,000 jobs and IAG expects to report restructuring charges of about €330 million in its 2020 results associated redundancies.

The BA headcount was reduced by 8,236 by the end of August due to staff leaving the business and mostly as a result of voluntary redundancy, IAG revealed.

“It has concluded labour agreements with its pilots, engineers and Heathrow customer service staff,” the group added.

“In regard to cabin crew, agreement in principle has been reached with Unite and a consultative ballot is expected to start shortly.

“Other consultation discussions continue, including with Heathrow ground handling services and cargo operations staff, UK contact centre employees and Gatwick-based cabin crew.”

Iberia and Vueling continue to benefit from the Spanish government’s  furlough scheme, which is expected to be extended into 2021.

Aer Lingus has implemented reductions in salaries and working hours across and expects 250 voluntary redundancies by the end of 2020.

IAG said it continues to expect that it would reach breakeven in terms of net cash flows from operating activities during the final quarter of this year “as a result of mitigating actions taken to reduce operating expenses further and enhance working capital”.

Third quarter 2020 capacity is expected to decline by 78% compared to 2019 and lower than a decline of 74% previously expected.

Capacity for the fourth quarter is expected to decline by 60% compared to 2019 and compared to a decline of 46% previously expected.

Capacity for 2021 is expected to decline by 27% compared to 2019, a reduction compared to 24% previously planned.