British Airways owner, IAG, gets $955 million from Amex deal
British Airways-owner International Airlines Group (IAG) has said that American Express would pay it 750 million pounds ($955 million) to renew their partnership, providing a welcome boost to the airline’s finances at a time when it is burning through cash.
Since lockdowns have eased, flying has restarted, but pressure remains on airline companies like IAG because travel is still at less than half of pre-pandemic levels due to ongoing restrictions for some destinations and consumer worries, says Reuters.
IAG’s finances have been strained by the pandemic, leading to media speculation that it could need to raise new equity. It said at the end of April that it had 10 billion euros ($11.6 billion) of liquidity and it was burning through 200 million euros a week.
The 750-million pound boost from the partnership deal announced on Friday could give it more breathing space, says Reuters. Analysts said in a note that the news was positive, giving the company, whose liquidity could have fallen to around 4 billion euros since its last update, another month’s worth of cash burn.
IAG’s shares have lost 67% of their value so far in 2020.