British Airways secures £2 billion loan from UK Export Finance
International Airlines Group has confirmed that its subsidiary British Airways has secured a £2 billion state-guaranteed loan that it plans to start using this month.
This five-year loan, which can be repaid at any time subject to notice, was underwritten by a syndicate of banks and “partially guaranteed” by the UK Export Finance (UKEF).
*The UKEF is the export credit agency and provides the guarantee to support the working capital and capital expenditure needs of UK exporters who meet certain criteria.
The IAG said the loan “will be used to improve liquidity and provide British Airways with the operational and strategic flexibility to take advantage of a partial recovery in air travel demand in 2021, when Covid-19 vaccines will be distributed worldwide.
The facility is subject to certain conditions, including restrictions on British Airways’ ability to pay dividends to its parent company IAG during the term of the loan.
International Airlines Group stated that the group “continues to have strong liquidity”, with liquidity and undrawn facilities of EUR 8 billion as of November 30, 2020, excluding the UKEF facility, and added that they are “studying other debt initiatives to further improve their liquidity and will update the market in due course“.
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British Airways cancels more than 15 long-haul routes
British Airways has decided to reduce next season’s program by canceling more than 15 long-haul routes in 2021. The airline continues to experience a significant decline in demand for international air travel.
The British airline plans to permanently cancel services on more than 15 long-haul routes from the start of the 2021 summer season. BA said that U.S. destinations such as Pittsburgh and Charleston, as well as Calgary, Canada; Seoul, South Korea; Durban, South Africa; Dammam, Saudi Arabia; Lima, Peru; Osaka, Japan; Kuala Lumpur, Malaysia; Abu Dhabi, United Arab Emirates; and Muscat, Oman will no longer be served after March 28, 2021.
BA has also scheduled April 24, 2021, as the last day of operations to Seychelles, a popular winter vacation destination, while temporarily cutting all operations to Sydney, Bangkok and San Jose from March 28 to at least October 30, 2021.
“We are sorry that due to the current coronavirus pandemic and global travel restrictions, we, like other airlines, have a reduced and aggressive program. We will be in contact with all customers whose flights are affected and advise customers to check the airline’s website for the latest flight information,” a BA spokesperson told local media on December 17, 2020.
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