Aer Lingus parent International Airlines Group (IAG) has signed a $1.8 billion (€1.5 billion) revolving credit facility with a syndicate of banks as it continues to battle with the effect of the Covid-19 crisis.
The facility, which is available for a period of three years, plus two one-year extensions, is available to Aer Lingus, British Airways and Iberia, each of which has a separate borrower limit within the overall facility.
Amounts drawn would be secured against eligible unencumbered aircraft assets and take-off and landing rights at both Heathrow and Gatwick airports, IAG said.
British Airways has cancelled an existing facility that was due to expire on June 23rd and which had $786 million undrawn and available as of the end of December 2020. In addition, about €400 million of facilities is due to expire undrawn by the end of March.
Arrangement
IAG said that as a result of the new arrangement its total facilities have increased by nearly €400 million and their weighted average availability period has extended by at least 1.5 years.
"IAG continues to have strong liquidity with an estimated total as of 31 March of €10.3 billion, comprised of €7.8 billion cash, cash equivalents and interest-bearing deposits, €1.7 billion undrawn general facilities, including today's announced facility undrawn, and €0.8 billion committed aircraft-financing facilities," said chief financial officer Stephen Gunning.
The group last week raised €1.2 billion in a bond issue, which it said would help it survive a potentially longer than expected travel downturn.
The company is burning through about €185 million a week as a result of the pandemic.
IAG reported a €6.9 billion after tax loss in 2020, compared with a profit of €1.7 billion the previous year. Group revenues fell 75 per cent to €5.5 billion last year from €22.47 billion in 2019.
The company warned late last month that job losses at Aer Lingus could near 600 as the Irish-founded carrier reported a €563 million loss for 2020.
