Portugal's ailing airline TAP has today posted a first quarter loss of €365.1m due to the impact of the Covid-19 pandemic on global travel and the depreciation of the euro against the US dollar.

"The coronavirus pandemic continued to delay the demand recovery, with an increase in cases and new travel restrictions during the first three months of 2021," TAP said in a statement.

TAP's total operating income dropped 74% between January and March from a year ago and passenger revenue fell 83%. The airline posted a €395m loss in 2020 as a whole.

There were some signs of recovery in January, TAP said, but additional restrictions imposed during the following months in countries where the airline operates forced TAP to quickly adjust its capacity again.

Portugal imposed a nationwide lockdown during most of the first quarter to tackle a devastating Covid-19 surge in January, keeping visitors away and most flights grounded.

According to the International Air Transport Association (IATA), some recovery is expected in the upcoming months as travel restrictions are eased due to the rollout of Covid-19 vaccines and pent-up travel demand.

"As such, TAP stands ready to adjust its capacity and meet an increase in demand," the company said.

Earlier this month, a Luxembourg-based General Court upheld Ryanair's fight against the rescue loan TAP received in 2020 from the state, with the European Commission's blessing, on the grounds that European regulators failed to justify the huge cash injections.

But Portugal's economy minister told Reuters the ruling against the €1.2 billion rescue loan to TAP airline did not hinder negotiations on its restructuring plan and TAP could continue using that money.