Aer Lingus has secured an extra €200m in loans from the Government as it moves to improve its liquidity after having taken a financial battering during the worst of the Covid crisis, which saw air travel effectively halted for nearly two years.
The new loan brings to €350m the total Aer Lingus has borrowed from the State since Covid restrictions started impacting the airline industry.
The airline agreed a €150m debt facility, through the NTMA-managed Ireland Strategic Investment Fund (ISIF), at the end of 2020. ISIF is again providing the additional funds via a three-year loan facility.
“The increase in the available facility from ISIF to €350m provides additional resilience and, together with the airline’s focus on improving our cost efficiency and competitiveness, it is an important element as we plan our recovery,” said Aer Lingus chief financial officer Elizabeth Haun.
Last month, Aer Lingus posted a €347m operating loss for 2021, down from €361m in 2020, but still a long way off 2019’s pre-Covid profit of €276m.
At the time of the results, Aer Lingus CEO Lynne Embleton said she was “optimistic” about the airline’s recovery chances, but warned it would take time to repair its balance sheet after two years of pandemic upheaval.
While saying she was comfortable with Aer Lingus’s liquidity position, Ms Embleton said the airline remained in discussions with owner IAG — which also owns British Airways and Spanish carriers Iberia and Vueling — and ISIF over its liquidity needs.
ISIF said its loans to Aer Lingus are aimed at supporting the airline’s recovery and boosting Ireland’s connectivity. The fund has also agreed a €6m loan facility with Emerald Airlines, the new operator of the Aer Lingus Regional service, which will fund its launch and scale-up.