Tags: Coronavirus | airlines | borrow | 31 billion | pandemic | travel

Airlines Borrow $31 Billion to Weather Pandemic Blow to Travel

Airlines Borrow $31 Billion to Weather Pandemic Blow to Travel
(380-Janzerd/Dreamstime)

Monday, 27 April 2020 02:37 PM

Lenders worldwide have pledged more than $31 billion of loans to major airlines scrabbling to line up funding as the coronavirus pandemic forces them to ground their fleets.

Companies from the Americas account for bulk of the borrowings with almost $20 billion in total, according to data collated by Bloomberg. In the dash to secure financing, airlines have either been drawing down from on existing credit lines or taking on new loans.

The pandemic poses an unprecedented challenge to aviation and tourism with airports around the world shuttered by governments seeking to stem the spread of the virus.

The response from airlines has been a stampede to borrow from governments and banks. As well as the loans to U.S. carriers, European airlines have raised 6.83 billion euros ($7.4 billion) since March 9, while Asian firms have lined up $4.1 billion.

The International Air Transport Association has repeatedly warned the health crisis could bankrupt half the world’s airlines, pushing countries such as France and the Netherlands to prepare state bailouts.

Air France-KLM, the largest borrower from the sector, got a 4 billion-euro loan from six banks with the French state guaranteeing to up to 90%. In addition, the airline arranged a 3 billion-euro loan from the government, which is a direct shareholder. The company had previously drawn down on an existing 1.1 billion-euro credit line.

The U.K.’s EasyJet Plc also raised 600 million pounds ($744 million) from the government’s Covid Corporate Finance Facility in addition to a roughly 400 million-pound bank loan. The carrier has also drawn down on an existing $500 million revolving facility.

In Asia, borrowers have been tapping funds from domestic lenders. Bank of Taiwan provided NT$20 billion ($666 million) of direct loans each to China Airlines Ltd. and Eva Airways Corp., while Singapore Airlines Ltd. arranged a S$4 billion ($2.8 billion) loan with DBS Bank Ltd.

Meanwhile, at least $5 billion of deals are still in the pipeline, including loans for Emirates Airline, Japan’s ANA Holdings and Iberia, the Spanish unit of British Airways owner IAG SA.

© Copyright 2020 Bloomberg News. All rights reserved.


   
1Like our page
2Share
StreetTalk
Lenders worldwide have pledged more than $31 billion of loans to major airlines scrabbling to line up funding as the coronavirus pandemic forces them to ground their fleets.
airlines, borrow, 31 billion, pandemic, travel
340
2020-37-27
Monday, 27 April 2020 02:37 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved