UPDATE 2-BA-owner IAG cautious on recovery, sees summer capacity rising to 45%

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LONDON, July 30 (Reuters) - IAG said summer
capacity would rise to 45% of pre-pandemic levels from 22% in
the previous quarter, in the latest sign that a travel recovery
is underway, although the British Airways-owner said significant
uncertainty remained.

IAG said on Friday that it was focused on ensuring it could
quickly react to changes in restrictions and take advantage of
demand where it arose, but declined to give a profit forecast
for the year due to COVID-19.

Britain will lift more restrictions on arrivals from abroad
on Monday, allowing IAG's usually most profitable airline BA to
catch up with Spanish units Iberia and Vueling which have
already benefitted from an earlier loosening of travel rules in
Europe.

But many barriers to travel remain in place.

The United States is closed to visitors from Britain, a big
blow to BA's transatlantic business, while expensive COVID-19
testing measures are still in place in some countries, dampening
demand.

IAG's plan to fly 45% of 2019 capacity in its July-September
quarter, put it behind competitors.

Air France-KLM said on Friday it expected third
quarter capacity at 60-70% of 2019 levels, while easyJet
plans to fly 60% of its pre-pandemic capacity.

Ryanair earlier this week raised its forecast for
full-year traffic on strong summer bookings.

Low levels of flying due to ongoing pandemic restrictions
meant that for the three months to the end of June, IAG reported
an underlying operating loss of 1.045 billion euros ($1.24
billion), in line with a consensus forecast for a 1.036 billion
euros loss.

IAG said it had liquidity of 10.2 billion euros and added
that it continued to preserve cash by reducing its cost base.
($1 = 0.8418 euros)
(Reporting by Sarah Young; editing by Guy Faulconbridge)