British Airways parent IAG has tapped UK government-backed loans to boost liquidity, in a sign of the damage wrought by the coronavirus on even the industry’s strongest players.
IAG accessed 300 million pounds ($371 million) from the Coronavirus Corporate Finance Facility in the second week of April, taking state-supported funding to $1.45 billion that includes Spanish backing. The group, which initially signaled it wasn’t seeking aid, said it’s essentially grounded until July, when it’ll start restoring flights.
CEO Willie Walsh said IAG needs to restructure in all areas as it slims down for a tougher future. British Airways is planning to slash 12,000 jobs – 30 per cent of the workforce – and is considering plans to close its secondary hub at London Gatwick airport. “We do not expect passenger demand to recover to the level of 2019 before 2023 at the earliest,” Walsh said.
This means group-wide restructuring is essential in order to get through the crisis and preserve an adequate level of liquidity.”