The airline industry continues to face troubling times as coronavirus hinders passenger demand levels. As such, airlines worldwide are calling on financial support from their respective governments to remain stable. One of these is Irish flag carrier Aer Lingus, which has secured a €150million ($180 million) recovery loan.
Part of a wider recovery fund
According to FlightGlobal, Aer Lingus has succeeded in securing part of a wider €2 billion ($2.41 billion) state recovery fund made available by the Irish government. Known as the Pandemic Stabilisation and Recovery Fund, Ireland’s finance ministry established the scheme last year. The program is part of the Ireland Strategic Investment Fund (ISIF). It aims to assist companies that have struggled as a result of the impacts of the ongoing pandemic.
Aer Lingus has received a debt funding loan amounting to €150million ($180 million). This represents 7.5% of the total fund. The deal is said to have been finalized during the final quarter of 2020. According to a spokesperson for the National Treasury Management Agency, its goal is to strengthen the airline’s liquidity position over three years. The spokesperson continues:
“ISIF and Aer Lingus have agreed commercial terms on the structure, pricing, and repayment of the loan that are consistent with ISIF’s statutory ‘double bottom line’ mandate to invest in businesses and projects on a commercial basis in a manner designed to support economic activity and employment in Ireland.”
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Potentially a big year for Aer Lingus
With this additional layer of financial security in place, Aer Lingus can look ahead to what 2021 might have in store. Last November, Simple Flying reported that it had secured slots at Manchester to operate direct UK-US transatlantic flights over the summer.
The US Department of Transportation (DOT) approved these plans the following month. This would see it join the oneworld transatlantic joint venture current alongside carriers such as American Airlines and British Airways. With the airline industry’s current state making the near-future hard to predict, it is difficult to know if and when these flights will launch. Nonetheless, it represents a potentially exciting step forward for the airline on long thin routes.
Not the only airline to receive assistance
Aer Lingus is far from the only carrier to have reached out for government support during these difficult times. Even the largest airlines have not been immune from this financial necessity. Indeed, last month, Simple Flying reported that US legacy carrier Delta Air Lines would be receiving an additional $3 billion.
This is more than the entire Irish recovery fund altogether! However, obtaining such assistance is not always an easy matter. Last month, the Air France-KLM Group saw its negotiations on receiving funds reach a standstill. The group is set to publish its annual financial results later this month.
What do you make of Aer Lingus receiving government support? How do you see 2021 panning out for the Irish flag carrier? Let us know your thoughts in the comments.
