Shares in International Consolidated Airlines Group SA (LSE:IAG) sank 2.7% to 113.0p after its British Airways (BA) airline suspended the sale of short-haul flights from London Heathrow airport until Tuesday 9 August.
BA's decision to temporarily ban bookings on domestic and European flights was taken to meet the airport’s passenger numbers cap.
"As a result of Heathrow's request to limit new bookings, we've decided to take responsible action and limit the available fares on some Heathrow services to help maximise rebooking options for existing customers, given the restrictions imposed on us and the ongoing challenges facing the entire aviation industry," the British flag carrier said in a statement.
Heathrow revealed in July that a maximum of 100,000 departing passengers are allowed up until 11 September.
Tens of thousands of seats were taken off sale, with the airline hoping demand and prices rise.
BA’s initial response to Heathrow’s announcement was to cancel 10,300 flights until October, with an estimated one million passengers impacted.
The Competition and Markets Authority and the Civil Aviation Authority circulated a joint letter to carriers, expressing concern that "consumers could experience significant harm unless airlines meet their obligations".
Tens of thousands of flights have already been cancelled this summer due to staff shortages coupled with soaring demand.