BUSINESS NEWS


IAG extends credit facility of $1.38bn for a further year


British Airways announced it had secured additional credit on Monday. Parent International Airlines


Group (IAG) revealed BA had extended for one year a “revolving credit facility” for $1.38 billion to June 23, 2021.


IAG ‘has strong liquidity’


In a statement, BA chief


financial officer Steve Gunning said: “IAG continues to have strong liquidity with cash, cash equivalents and interest-bearing deposits of €7.2 billion as at March 27. Total cash and undrawn facilities are currently €9.3 billion. “In addition, the group is


exploring a number of operational and treasury initiatives to improve further its cashflow and liquidity.” As yet, he said: “IAG has not


drawn down on any of its facilities.”


Tui seals €1.8bn bridging loan from German state


Ian Taylor


Tui has secured German government approval for a €1.8 billion bridging loan from state- owned development bank KfW. Announcing the loan facility late


last week, Tui Group chief executive Fritz Joussen said: “We give thanks to the government, parliament and KfW for acting quickly. The bridge loan is an important first step for Tui to successfully bridge the current exceptional situation.” The facility will swell Tui’s


existing credit of €1.75 billion. It remains subject to bank approval and requires Tui to waive dividend payments to shareholders for the duration of the facility. A Tui spokesman said: “The


banks providing the funds still have to agree the structure of the loan. Once they agree, the loan becomes available. But we will not immediately draw on it. As long as we don’t need it, we won’t draw on it.” The spokesman added: “It gives


us time and allows us to continue as a business when we have no


travelweekly.co.uk


Fritz Joussen: ‘Our business model is intact’


Tui is a healthy


company but one temporarily with no revenue [and] this must be bridged


turnover but costs are ongoing.” Media reports suggested Tui


would also seek a loan facility in the UK. However, the spokesman said: “We are at the table for discussions in different markets. It does not mean we ask for a loan in the UK as well.” Joussen insisted: “Tui is a


very healthy company. We were economically successful before the crisis and will be again after. Our business model is intact and we have over 21 million loyal customers. “However, we are currently facing


unprecedented international travel restrictions. We are temporarily a company with no product and no revenue [and] this situation must be bridged.” Tui had been in line for a record


year up to early February when it revealed January as “the strongest booking month in the company’s history” and bookings for summer 2020 running 14% up year on year.


WTTC urges action to stem ‘75m job losses and $2.1tn economic impact’


Up to 75 million jobs in travel “are at immediate risk” and threaten “an economic meltdown” without urgent government action, the World Travel & Tourism Council has warned. The WTTC updated its estimate


of the impact of the Covid-19 pandemic last week, describing the surge in projected job losses as “alarming” after increasing its forecast by 50% in under a fortnight. It predicted the downturn in


tourism would cost the global economy $2.1 trillion. In Europe, it forecast up to 10


million jobs could go at a cost to the continent’s economy of $552 billion. But despite the numbers of


infections and dead in Italy, Spain and the US overtaking China, the WTTC forecast Asia-Pacific would remain the most heavily affected, with up to 49 million jobs at risk. The WTTC suggested North


America could see seven million travel jobs lost, and warned the UK, Italy, Germany, France, Brazil, Japan, Indonesia and India could also “be hit hard”. WTTC president and chief


executive Gloria Guevara said: “This chilling new figure represents the collective delay by many governments to react quickly enough. If action is not taken within the next few days, the sector faces an economic meltdown from which it will struggle to recover.” Separately, the UN World


Tourism Organisation forecast the pandemic could result in a year-on- year drop in international arrivals of up to 30% and a loss of up to $450 billion in tourism receipts. The annual fall in arrivals


following the 2008 financial crash was just 4% worldwide.


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