14 SEPTEMBER 2020

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Article from BTNews 14 SEPTEMBER 2020

More funds for IAG airlines

IAG, the parent company of British Airways, has launched a €2.74bn rights issue raising fresh money from existing shareholders including 25.1% shareholder Qatar Airways. This is fully underwritten by a group of banks which ensures that IAG receives the funds even if the share price falls.

In a lengthy statement IAG says the forecast for passenger volumes for the rest of 2020 is worse than had previously been expected.

Since July, IAG has experienced an overall levelling off of bookings. Short-haul bookings have fallen slightly following the re-implementation of quarantine requirements by the UK and other European governments for travellers returning from specific countries including Spain.

Where travel markets have reopened without border restrictions and quarantine requirements IAG has been encouraged by the level of pent-up demand that exists for air travel.

IAG has continued to implement its restructuring plans. British Airways is in the process of reducing headcount by up to 13,000. By the end of August, the headcount was reduced by 8,236 due to employees leaving the business and mostly as a result of voluntary redundancy. It has concluded labour agreements with its pilots, engineers and Heathrow customer service staff. In regard to cabin crew, agreement in principle has been reached with the union Unite and a consultative ballot is expected to start shortly.  Other consultation discussions continue, including with Heathrow ground handling services and cargo operations staff, UK contact centre employees and Gatwick-based cabin crew.

Iberia and Vueling continue to benefit from the Spanish Government’s ERTE furlough scheme, which is expected to be extended into 2021. Aer Lingus has implemented reductions in salaries and working hours across the airline and expects 250 voluntary redundancies by the end of 2020.

As at 31 August, the Group had total liquidity of €7.6bn.  On Friday 11 September the share price stood at 194p and has hovered around that price dropping dramatically from 669p in February.

Also see in this week's BTN:  COMMENT: Willie Walsh’s late departure    Alex Cruz goes live  All change at IAG   Luis Gallego starts at Waterside

www.iairgroup.com

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