International Airlines Group (IAG) has confirmed that its subsidiaries Iberia and Vueling have signed financing agreements for loans worth €1.1 billion.
The deal is subject to the loans being by Spanish state-owned bank Instituto de Crédito Oficial, with Iberia borrowing €750 million, and Vueling €260 million.
The five-year amortizing loans can be repaid at any time, and have been set up “within the legal framework set up by the Spanish government to mitigate the economic impact of Covid-19”.
IAG also confirmed that the arrangements “contain a number of non-financial covenants to protect the position of the banks, including restrictions on the upstream of cash to the rest of the IAG companies” – so the funds will not be accessible to British Airways.
Such is the current crisis facing the aviation industry that a number of major airlines worldwide have been forced to seek state bailouts to weather the storm.
We have rounded up some of these agreements, as well as potential deals which have yet to be closed, in this feature: