British Airways owner IAG SA is looking at raising as much as 2.75 billion euros (US$3.2 billion) in a share sale to help strengthen its balance sheet and ride out the coronavirus crisis.

The London-based group, which also owns Spain’s Iberia and Aer Lingus of Ireland, said Friday that it may opt for a rights issue, though no final decision has been taken.

While airlines worldwide are suffering after the pandemic upended travel, the premium markets on which IAG relies may be among the last to recover as economies stumble and people shun long-haul flights. The company also hasn’t received the billions in aid pumped into rivals Deutsche Lufthansa AG and Air France-KLM, with help limited to furlough funds and state-backed loans.

Given IAG’s market value of about four billion pounds (US$5 billion), the amount of money it aims to raise suggests the share count could more than double, leaving investors facing a choice between increasing their exposure or being substantially diluted, Sanford C. Bernstein analyst Daniel Roeska said.

‘Strategic Freedom’

The course of action is still preferable to seeking a bailout, according to Roeska, who said in a note that “private money rather than a government stake would allow the company to maintain strategic freedom.”

IAG shares closed 4.8 per cent lower in London, extending the decline this year to 68 per cent.

The fundraising could take place in September, according to a person with knowledge of the group’s plans who asked not to be named discussing the matter. Bloomberg reported last month that IAG was working with Goldman Sachs Group Inc. and Morgan Stanley on plans to boost liquidity.

U.S. Concern

High coronavirus infection rates in the U.S. are delaying a recovery in the lucrative North Atlantic market. While IAG had cash and undrawn facilities of 10 billion euros as of April 30, Roeska said the carrier may be concerned about that trend, or that its cash burn could be worse than expected.

IAG also said Friday it had renewed an air-miles deal with credit-card giant American Express Co., adding 750 million pounds to its coffers. It is also cutting thousands of jobs and retiring older planes to slash costs.