British Airways’ owner, IAG, has said it is pinning its hopes on the revival of transatlantic travel next week, as it warned that pandemic disruption would drive a loss of €3bn (£2.6bn) for 2021. The IAG chief executive, Luis Gallego, said the reopening of the US border to foreign nationals from Monday was a “pivotal moment for our industry”. BA said its planes to the US, its biggest market, would be nearly full next week, and the airline would restore more services as UK leisure travellers are allowed into America for the first time since in March 2020. Bookings have surged since the Biden administration announced it would relax the Covid-19 restrictions in September. The airline’s chief executive, Sean Doyle, said the signs were “very encouraging in terms of the demand for travel … Bookings have been up 167% since the announcement came out.” While families and friends trips would push “very high load factors next week as the market opens up”, Doyle said that BA was also seeing corporate or business travel pick up in bookings from both the UK and the US. IAG, whose airlines also include Iberia and Aer Lingus, reported a €485m loss for its third quarter, the key summer period between July and September. It was lower than expected and less than the €1.3bn loss in the same period last year. An annual loss of €3bn would be lower than the €4.3bn deficit reported in 2020. Passenger capacity in the third quarter hit 43% of levels achieved before the pandemic in 2019 – almost double the 21.9% recorded in the previous quarter – with the final three months of the year forecast to hit 60% of pre-pandemic capacity. “There is a significant recovery under way, we continue to capitalise on surges in bookings when travel restrictions are lifted,” Gallego said. “All our airlines have shown improvements.” In October, the government gave the industry a boost by moving to cut the number of countries on the “red list”, which has the toughest restrictions, including 10 days of quarantine, from 54 to seven. All remaining countries were removed from the list on Monday. Coronavirus testing rules were also simplified last month, with PCR tests, which cost about £75 each on average, for international travellers scrapped in favour of cheaper and easier lateral flow tests. Gallego said that “premium leisure” travel has proved to be a strong theme among travellers aiming to finally enjoy a holiday abroad, while there were also signs of recovery in business trips. “Long-haul traffic has been a significant driver of revenue, with bookings recovering faster than short haul as we head into the winter,” he said. “Premium leisure is performing strongly at both Iberia and British Airways and there are early signs of a recovery in business travel.” IAG reported €2.7bn in passenger and cargo revenue in the third quarter, almost triple the €750m in the same period last year. The company said that operating cashflow in the third quarter was positive for the first time since the start of the pandemic and is targeting a return to profitability in 2022, possibly as early as the second quarter. Gallego said that BA’s plans to restart operations at Gatwick airport, serving primarily short-haul leisure routes, under a new BA-branded subsidiary were moving forward again after stalling in early talks with unions. Doyle added: “We succeeded in negotiating the flexibility and the competitiveness we need with our crew agreements and we are now working through the final stages of negotiations with our ground staff and with Gatwick airport, but we’ll be firming up our plans imminently in the coming weeks.” Shares in IAG, which expects capacity overall this year to be 37% of 2019 levels, fell 1.5% in early trading on Friday morning but rebounded to be up 4% by mid-afternoon. Analysts said recovery would be slow. Russ Mould, an investment director at AJ Bell, said IAG was “still stuck on the runway” and could not point to a return to profitability in 2022 with any degree of confidence.