Aer Lingus and British Airways-owner IAG has cut back plans to ramp up short-haul flights to avoid disruption at Heathrow airport this summer.

This sent its shares skidding 8% today after the airline group admitted that it does not have enough staff to cope.

The company, which also owns Iberia and Vueling, has struggled with crew absences caused by the Omicron-variant of Covid-19 and a shortage of ground staff.

Compounded by IT problems, British Airways flights had to be cancelled during the first quarter.

IAG chief executive Luis Gallego said the issues resulted in a first-quarter operating loss of €754m, missing average analyst forecasts of a €510m loss by a wide margin.

IAG said it still expected to report operating profits from the second quarter and for the year.

CEO Gallego said the challenges it was facing were being felt across the aviation industry.

The International Air Transport Association (IATA) said this week that insufficient resources at airports to handle growing numbers of passengers needed to be addressed to avoid frustrating consumer demand for travel.

IAG lowered its full-year group capacity guidance to around 80% of 2019 levels from its February forecast of 85% "to give more stability for the summer", Gallego said.

Analysts at Morning Star noted BA is the biggest contributor to IAG's revenue and its problems were a drag on its recovery.

"Issues are being addressed urgently, but could still take a couple of months to resolve," they said.

Gallego said IAG was struggling to recruit staff for "below the wing" roles, such as ground handling, and it was taking about 20% longer for new staff to get security clearance.

Most of the BA schedule cuts would be in short-haul to protect its long-haul network, he said, adding the group's other airlines were not seeing the same problems.

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IAG CEO Luis Gallego

The easing of government-imposed travel restrictions resulted in improved travel demand, he said, with no noticeable impact from the war in Ukraine.

"Demand is recovering strongly in line with our previous expectations," he said, adding that business travel was coming back, led by Britain and the US.

Small and medium-sized enterprises were leading the recovery ahead of large corporates, he said, which in some cases had new policies linked to sustainability that were impacting flying.