Qatar Airways supports British Airways and Iberia with $ 817 million

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Dubai, United Arab Emirates (CNN) – Qatar Airways will support British Airways and Iberia with hundreds of millions of dollars, while the two companies are struggling to continue in light of the Corona pandemic.

The International Airlines Group, which owns the two European carriers, said on Friday that it plans to raise up to 2.75 billion euros, or $ 3.3 billion, from shareholders, including from the official Qatar Airways, to help overcome the deepest crisis in aviation history.

The company plans to use the funds to pay off the debt and increase the amount of cash it holds, while preparing for several years of low demand.

The aviation industry has been hit by the Corona pandemic, and the international airline group does not expect global passenger demand to return to 2019 levels before at least 2023. British Airways has announced plans to cut up to 12,000 jobs, more than a quarter of its workforce, and will also suspend its fleet of Boeing 747s completely 4 years before the scheduled date.

International Airlines Group, which also owns Air Lings and Vueling Airlines, revealed a record operating loss of approximately 1.4 billion euros, or $ 1.7 billion, in the first half of 2020. It was also affected by a loss of $ 2.6 billion as a result of the early retirement of the two Boeing aircraft 747 and Airbus A340. The group has canceled or delayed nearly half of all planned aircraft shipments until 2022.

Passenger traffic decreased in the second quarter by more than 98% compared to the same period last year. Revenue in the quarter decreased by almost 90%.

Qatar Airways is the largest shareholder in the group with a 25.1% stake. International Airlines Group said that Qatar will support the capital increase, which means that it will save about 688 million euros, or 817 million dollars of the new money.

The group said in a statement that Qatar Airways “confirmed its support for the proposed capital increase and has irrevocably pledged to sign up to obtain a proportional benefit.”

Qatar is seeking two seats on the Board of Directors. Shareholders will vote on appointments and a capital increase in September. Goldman Sachs, Morgan Stanley and Deutsche Bank will also secure the remainder of the rights issue.

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