Last checked at 
* Adj op loss 4.37 bln euros vs forecast 4.45 bln
* Urges common testing standards, digital health checks
* Jan-March capacity seen at 20% of 2019's level
* Shares up 4%
(Recasts with CEO comments, adds analyst comment)
By Sarah Young
LONDON, Feb 26 (Reuters) - British Airways-owner IAG
is counting on digital health passes to help spur a
travel recovery this summer, after the pandemic pushed it to a
record 7.4 billion euro ($9 billion) loss last year, when it ran
just a third of normal flights.
Tighter travel restrictions over the last two months have
threatened to ruin Europe's critical summer season and leave
some airlines needing more funding, analysts have warned.
But after taking on new loans, IAG said it had 10.3 billion
euros of liquidity and was well set to ride out the crisis.
"We've got very strong liquidity going into 2021 ... so no,
we will not need additional funding," finance chief Steve
Gunning told reporters on a call.
European airlines hope travel restrictions will soon be
eased to allow them to make money again. Britain on Monday laid
out plans for travel markets to possibly reopen from mid-May,
prompting a flood of bookings.
IAG chief executive Luis Gallego said if the UK plans went
ahead, it would be a "positive summer", but digital health
passes were needed to unlock the market.
"Health passes are going to be the key to restart the
aviation and the travel," said Gallego, who is six months into
the job, calling for a digital system that could include test
results and proof of vaccination.
Several countries are considering health passports to help
revive travel, but are worried about risks to civil liberties.
However, Britain's Heathrow airport warned this week that
dealing with a big rise in passengers would not be possible with
current paper-based checks.
IAG shares were up 4% at 194 pence in morning trading. They
have jumped 13% in the last five days, after Britain's
announcement on a travel restart, but over the last 12 months
have lost half their value.
CASH BURN
The pandemic has already crippled airlines like Norwegian
Air, and left major players such as Air France-KLM
and Lufthansa relying on state support.
While a recovery is now in sight, there is still much
uncertainty.
IAG, which also owns Aer Lingus, Iberia and Vueling, said it
could not give profit guidance for 2021, and asked how many
flights it might run this year, Gallego said: "To be honest
nobody knows what's going to happen."
For January-March, IAG said it expected to fly about 20% of
2019's capacity, compared to the whole of 2020 when it flew at
34% of capacity.
IAG's focus for now is on cutting costs to reduce cash burn.
Weekly cash burn fell to 185 million euros in the first quarter,
down 30 million from the previous quarter.
Last October, IAG secured shareholder backing for a 2.74
billion euro capital hike and Goodbody analysts said it might
have to call on investors again.
"With further losses expected this year ... another rights
issue can't be ruled out in the medium term," they said.
IAG's operating loss before exceptional items, its preferred
measure, came in at 4.37 billion euros, slightly better than
analysts' consensus forecast for a 4.45 billion loss.
($1 = 0.8228 euros)
(Reporting by Sarah Young. Editing by Kate Holton and Mark
Potter)
