IAG has signed a $1.76 billion revolving credit facility with a syndicate of banks, using take-off and landing slots at both London Heathrow and Gatwick airports as collateral.
The three-year facility, which contains two one-year extension periods at the lenders’ discretion, is available to IAG’s Aer Lingus, British Airways and Iberia subsidiaries. Each airline has separate borrower limit.
In addition to Heathrow and Gatwick slots, credit will be secured against unencumbered aircraft assets, states IAG in a 23 March regulatory filing.
IAG also disclosed that British Airways has cancelled a US-dollar facility that was due to expire on 23 June 2021. The facility had $786 million undrawn and available at 31 December 2020. A further €400 million ($475 million) of facilities are due to expire undrawn by the end of this month.
“As a net result, the group’s total facilities have increased by nearly €400 million, and their weighted average availability period has extended by at least 1.5 years compared to previously,” says IAG.
The airline group estimates that it will have €10.3 billion of liquidity by 31 March. This includes €7.8 billion in cash, cash equivalents and interest-bearing deposits, €1.7 billion of undrawn general facilities – including the revolving credit facility announced today – and €800 million of committed aircraft financing facilities.