Spanish airlines Iberia Lineas Aereas De Espana and Vueling Airlines SA have signed separate loan agreements for a combined 1 billion euros ($1.1 billion) to weather the disruption caused by the pandemic, parent IAG SA said in a statement.
Iberia’s 750 million euros loan and Vueling’s 260 million euros loan, will be provided by a group of banks and it’s conditional on the Instituto de Credito Oficial’s support, according the statement. The five-year amortizing loans can be repayable at any time. The agreement excludes other IAG companies from tapping on any funds of the two Spanish units.
IAG doesn’t expect passenger demand to recover to 2019 levels for “several years,” it said in a statement this week. The company said its operating loss before exceptional items was 535 million euros in the period ended March 31.
Airlines have been the largest beneficiaries of state-supported bailout programs, raising more than 6 billion euros in new funds, with at least 2 billion euros in the pipeline.