Aer Lingus and British Airways owner IAG is to further reduce its capacity for April and May, while it has also scrapped its 2019 dividend in an attempt to cut costs and shore up liquidity as the coronavirus pandemic rattles the airline industry. 

IAG also said it would propose to allocate its fiscal year 2019 profits to a voluntary reserve. 

IAG is to reduce its capacity by 90% in April and May when compared to the same month of last year, compared to the 75% reduction it had previously announced.

Meanwhile, British Airways has struck a deal with unions that will see 30,000 staff temporarily laid off for this month and the next.

During that time staff will be able to avail of the British government's Covid-19 Job Retention Scheme, which will pay them 80% of their base pay and certain allowances.

The deal is focused on the airline's staff including cabin crew, ground staff, engineers and those in head office. 

It has already agreed new terms with its pilots where they will take two weeks' unpaid leave in April and May. 

With planes unable to fly because of travel restrictions, compounded by a plunge in demand over fears of contagion, airlines worldwide have grounded most of their fleets, and many have said they need government support to survive. 

Data firm OAG said the aviation industry was less than half the size it was in mid-January, just before countries started confirming coronavirus cases outside China. 

Britain has launched a job retention scheme which covers 80% of someone's salary capped at a maximum of 2,500 pounds a month but rival Virgin Atlantic has said it will need additional financial help to avoid going bust.

Rival airline EasyJet said on Monday that it had grounded its entire fleet.