IAG – the parent company of Aer Lingus, British Airways and Iberia – has negotiated a $1.755 billion credit facility that is available for the next three years with an option to extend further. The loan is secured against aircraft assets and the landing slots at Heathrow and Gatwick airports, including the prized Aer Lingus slots at Heathrow that were central to the airline’s successful purchase by IAG in 2015.
The 23 slots controlled by Aer Lingus were then valued at around €900m – and given that IAG paid €1.36 billion for the airline it shows how valuable they actually are.
The new credit facility is available to Aer Lingus, British Airways and Iberia, each of which is assigned a separate borrower limit – but IAG did not disclose the specific amount for each airline.
In a note to the Stock Exchange, IAG chief financial officer Stephen Gunning said: “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.”
Aer Lingus reported an operating loss of €563m for 2020, with revenue slumping by 78 per cent due to minimal flying as a result of the pandemic – from €1.658 billion in 2019 to €467 million last year.
