IAG strengthens liquidity

Beleaguered British Airways' owner, International Airlines Group (AIG), has secured a further £1.3bn in credit through a deal with a syndicate of banks.

Last month Luis Gallego, IAG chief executive, reported a post-tax loss of £3.7bn for 2020, with group operating losses higher at £6.36bn.

IAG confirmed the deal for a three-year revolving credit facility, with the option of two additional one-year extension periods “at the discretion of the lenders”.

The facility will be made available to IAG airlines – BA, Iberia and Aer Lingus – each of which has a separate borrowing limit.

The sums will be secured against aircraft and take-off and landing slots at Heathrow and Gatwick.

The new credit facility will allow BA to cancel a US dollar credit facility due to expire in June which made available $786m in funds, plus about €400m in additional facilities scheduled to expire at the end of March.

The deal will extend IAG’s liquidity to an estimated €10.3bn at the end of March.

The group said the funds would be used to strengthen its balance sheet and increase its overall liquidity position to withstand “a more prolonged downturn in air travel” and provide operational and strategic flexibility “to take advantage of a recovery”.

Trustees of the BA staff pension scheme,  NAPS (New Airways Pension Scheme) also agreed to the airline deferring £450m in pension deficit contributions for the 12 months to September 2021.

www.iairgroup.com

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