BA and Air France-KLM plan share sales, layoffs to survive Covid
BRITISH AIRWAYS owner IAG has plans for a EUR2
BRITISH AIRWAYS owner IAG has plans for a EUR2.75 billion (US$3.3 billion) share sale, while rival Air France-KLM's Dutch arm said it would lay off 15 per cent of its workers and as well as raise fresh equity.
Both reported record quarterly losses, a measure of the strain on network carriers that have seen an unprecedented drop-off in traffic and still face months of pain.
'Anybody who believes this is a temporary crisis and thinks it can be resolved by temporary measures is misguided,' said IAG outgoing CEO Willie Walsh.
'Bookings are being suppressed by government restrictions,' said Mr Walsh, who predicted travel won't reach pre-scare levels until at least 2023.
To get through the crunch, IAG is counting on its No 1 investor Qatar Airways, which said it will back the rights issue. The Gulf airline, which holds a 25 per cent stake, has subscribed for its entitlement, with the rest of the capital increase fully underwritten, IAG said as it posted a second quarter operating loss of EUR1.36 billion.
The rights plan will be put to shareholders on September 8 and should be completed by the end of that month, it said.
Air France-KLM posted a quarterly loss of EUR2.61 billion and warned of 'significantly negative' earnings before interest, taxes, depreciation and amortisation in the second half.