LONDON: British Airways has boosted its liquidity by £2.45 billion as it tries to weather the coronavirus pandemic.
Owner International Airlines Group (IAG) said the airline has reached final agreement on a £2 billion loan underwritten by a syndicate of banks and partially guaranteed by the government’s UK Export Finance (UKEF).
The carrier expects to draw down from the five-year loan before the end of next month. British Airways has also reached agreement with the trustee of a pension scheme to defer £450 million of pension deficit contributions due between October 2020 and September 2021. It was due to fill the hole in its pension pot by March 2023, but the deferred contributions plus interest will be made as monthly repayments after this date.
The airline closed down the New Airways Pension Scheme (Naps) in 2018, moving its employees on to a new, less-generous fund.The Naps was a final-salary plan, which guaranteed workers would be paid a proportion of what their salary was in the year before they retired. IAG added that it “continues to explore other debt initiatives to improve further its liquidity”.
It swung to a pre-tax loss of 6.2 billion euros (£5.6 billion) for the nine months to the end of September 2020. British Airways has been badly hit by the collapse in demand caused by the coronavirus pandemic, with long-haul routes the worst affected. Passenger numbers are not expected to return to 2019 levels until at least 2023.