Monday, 30 March 2020

British Airways extends its revolving credit facility as aircraft are placed in storage

British Airways aircraft in temporary storage at Bournemouth Airport                                                    Photo NPAS 
International Airlines Group (IAG) the group behind some of Europe's major airlines, including Ireland's Aer Lingus, Spain's Iberia and the UK's British Airways has announced today that British Airways has been able to extend its US dollar secured Revolving Credit Facility for one year from 23 June 2020 to 23 June 2021. 

The amount available under the extended facility is $1.38 billion. Including the extended facility and some smaller additional facilities recently arranged, IAG has total undrawn general and committed aircraft financing facilities equivalent to €2.1 billion currently, compared to €1.9 billion at the end of 2019. IAG has not drawn down on any of its facilities.

IAG continues to have strong liquidity with cash, cash equivalents and interest-bearing deposits of €7.2 billion as at 27 March. Total cash and undrawn facilities are currently €9.3 billion.  In addition, the Group is exploring a number of operational and treasury initiatives to improve further its cash flow and liquidity and will update the market in due course.

IAG has, like many major airlines, been taking actions to reduce operating expenses and improve cash flow. These include grounding surplus aircraft, reducing and deferring capital spending, cutting non-essential and non-cyber related IT spend, freezing recruitment and discretionary spending, implementing voluntary leave options, temporarily suspending employment contracts and reducing working hours. 

Due to the ongoing crisis, it has been decided that the top-level management changes that had previously been announced would be put on hold, Luis Gallego will continue in his role as Iberia chief executive for the next few months, Willie Walsh not retire just yet and will continue to act as Group chief executive while Javier Sanchez will remain as Vueling chief executive.
Photo NPAS

British Airways has been putting a large number of its fleet in temporary or soft storage while the coronavirus COVID-19 crisis continues to hamper most normal flight operations.  Aircraft are being parked up at several regional airports including Cardiff, London City and Bournemouth (pictured above). The airline is also continuing to operate special repatriation flights, including three in the last two days bringing stranded Brits back from Peru. 

Foreign Secretary Dominic Raab said: "The Foreign Office has chartered 3 more flights for British travellers in Peru – as well as domestic flights to help those in Cusco. We continue to work around the clock to help British travellers struggling to get back to the UK and thank the Peruvian government for all their support in making this happen."

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