IAG SA will slash the work force at its flagship British Airways by almost 30 per cent in a painful restructuring aimed at shrinking the airline group for a downturn that could last for years.

IAG shares fell as much as 6 per cent Wednesday, after the airline group said that as many as 12,000 jobs will be lost at the U.K.s former state-owned airline.

A 1.3 billion-euro ($1.4 billion) charge from fuel and currency hedges added to the groups first-quarter operating loss, according to a statement late Tuesday. With its planes on the ground, IAG said operating results are likely to be significantly worse in the current period because the virus has pushed down demand.

The harsh steps are likely to be repeated by other airlines in days and weeks to come, after flight restrictions aimed at fighting the coronavirus threw the industry into its steepest downturn ever. Carriers are in desperate need of cash, with peers such as Air France-KLM and Deutsche Lufthansa AG chasing multibillion-euro bailouts. IAG has so far avoided tapping government-supported fundraising plans.

In the last few weeks, the outlook for the aviation industry has worsened further and we must take action now, British Airways Chief Executive Officer Alex Cruz said in a letter to employees. Any money we borrow now will only be short-term and will not address the longer-term challenges we will face.

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