British Airways’ parent company IAG swung to a pre-tax loss of 4.2 billion euro (£3.8 billion) in the first six months of the year.
This is down from a one billion euro (£0.9 billion) profit in the same period a year ago.
Revenue was 5.3 billion euro (£4.8 billion), some 56% lower than 2019’s levels.
IAG announced a plan to strengthen its balance sheet by raising 2.75 billion euro (£2.49 billion) through a proposed capital increase.
Chief executive Willie Walsh said: “All IAG airlines made substantial losses. As a result of Government travel restrictions, quarter two passenger traffic fell by 98.4% on a capacity reduction in the quarter of 95.3%.
“We have seen evidence that demand recovers when Government restrictions are lifted.
“Our airlines have put in place measures to provide additional reassurance to their customers and employees on board and at the airport.
“We continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels.”
IAG expects it will take until at least 2023 for passenger demand to recover to pre-coronavirus levels.
The firm said it is “restructuring its cost base to reduce each airline’s size”.
In April it announced that 12,000 British Airways jobs could be cut.
Mr Walsh said customers with pre-existing bookings are continuing to fly to and from Spain despite the UK Government’s decision to advise against non-essential travel to the country and re-impose quarantine requirements for people returning.
He told reporters: “People who have had bookings, they appear to continue to be travelling to and from Spain.”
He went on: “Our bookings are being suppressed by Government restrictions. When the restrictions of removed we see a significant increase in bookings.”
Mr Walsh said the scale of the challenge faced by the airline industry after 9/11 in 2001 and the global financial crisis in 2009 is “much smaller” than what it faces due to the pandemic.
“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.”