UPDATE 2-BA owner considering legal challenge on UK quarantine as relations fray

* IAG boss Walsh says looking at legal action

* Says govt did not consult industry over new legislation

* Relations between BA and govt strained under COVID

* IAG shares up 8%
(Adds detail, background)

By Sarah Young

LONDON, June 5 (Reuters) - The owner of British Airways is
considering launching a legal challenge against the UK's looming
quarantine plan, in the latest sign of a breakdown in relations
between airlines and the government over the coronavirus
pandemic.

With planes grounded since late March, airlines had hoped to
start flying and earning revenues again from July, but Britain's
14-day quarantine rule to be introduced on June 8 for arrivals
from abroad will hamper that recovery, say bosses.

Willie Walsh, the chief executive of IAG, said
industry had not been consulted on the quarantine rule and he
expected other airlines to consider their legal options too.

Ryanair Group Chief Executive Michael O'Leary has described
the plan as "useless and ineffective" and a threat to the
broader tourism industry, while Walsh said it would torpedo any
return to flying in July.

"We think it is irrational, we think it is disproportionate
and we are giving consideration to a legal challenge to this
legislation," he told Sky News on Friday.

Britain's big carriers, BA, easyJet and Virgin Atlantic,
have between them announced almost 20,000 job cuts to prepare
for a smaller travel market post-COVID-19.

Relations between BA and the government have come under
increasing strain as the crisis has progressed, with both sides
making threats.

A junior transport minister agreed with a lawmaker on
Wednesday who said BA should "pay a price" for putting thousands
of staff on notice of redundancy while accessing the
government's salary support scheme.

IAG's Walsh and the head of British Airways then declined to
attend a meeting with the UK interior minister on Thursday to
discuss quarantine plans.

The plan has been criticised by bosses from tourism,
hospitality and leisure industries, and by some of the
government's own lawmakers who question why it is being brought
in now when infection levels across many European countries are
much lower than they were months ago.

The government's chief scientific adviser Patrick Vallance
said on Wednesday that politicians decided the policy, adding
that quarantines worked best for restricting travel from
countries with high infection rates.

Shares in IAG rose 8% in morning trading amid a
rally in holiday-linked stocks on hopes that the worst of the
crisis is over.

(Reporting by Sarah Young and Michael Holden; editing by Kate
Holton)