BA owner IAG has launched a steeply discounted E2.75b rights issue to help shore up its finances through the disruption caused by coronavirus. The airline group also warned it expects to carry fewer passengers than forecast this year and next as travel restrictions and quarantine measures hamper its recovery. Alex Cruz, BA CE, was one of several UK airline executives to write to the UK PM Thursday to plead for further support including testing on arrival. The lette said the industry risked “ruin” otherwise. IAG, which announced the emergency fundraising in July alongside a E2b Q2 loss, will issue nearly 3b new shares at E0.92 each, a 36% discount based on the new fully expanded share capital. Current shareholders will be entitled to buy three of the new shares for each two shares they currently own. Stephen Furlong, analyst at Davy Research, said the discount was steeper than he had expected. The shareholder dilution was also more than he expected. “You can see what they are trying to do, raise the money no matter what,” he said. “The key was just to raise the money, the price was just a secondary thought.” The rights issue won the overwhelming support of shareholders at IAG’s annual meeting in Madrid this week. Qatar Airways, IAG’s largest shareholder which has steadily been building its stake in the airline group since 2015, took up its share entitlement in full. IAG said it expected to be able to survive a “prolonged downturn” in air travel, and is confident it will emerge from the crisis as a more nimble and flexible company.<br/>
oneworld
Airline giant IAG announced Thursday it was cutting more flights because of coronavirus restrictions and quarantine rules. It comes as IAG said it had raised E2.74b to help the company navigate through the Covid-19 crisis. IAG expects to operate 60% less capacity in the three months to the end of December from a year earlier. That compared with a previously planned capacity reduction of 46%. The conglomerate blamed the deeper cutbacks on "the impact of current travel restrictions and quarantine requirements on booking activity". Total 2020 capacity is expected to be 63% lower than in 2019 -- down from previous guidance of minus 59%. The European travel giant, whose portfolio also includes Aer Lingus, Level and Vueling, is in the process of axing 13,000 jobs or more than a quarter of its workforce. "IAG acted quickly to mitigate the impacts of the Covid-19 pandemic, bolster liquidity and to protect its long-term future," it added Thursday. "The capital increase, together with its quick response to the crisis, should enable the group to emerge from the current pandemic in a strong position." The company reiterated guidance that it would take until at least 2023 for passenger demand to recover to pre-pandemic levels.<br/>
A US bankruptcy judge Thursday rejected a US$2.4b financing plan for struggling LATAM Airlines on the grounds that a convertible loan included as part of the package would amount to "improper" treatment of other shareholders. The move is a setback for LATAM, which needs short-term liquidity. But in a lengthy court decision, the judge left the door open for the Chilean carrier to introduce a similar financing plan in the future, this time without the possibility of converting part of the loan into equity. The airline had no immediate comment on the decision. The proposal supported by LATAM was composed of a US$1.3b loan from asset management firm Oaktree Capital Management and a US$900m convertible loan from several key LATAM shareholders, including the Cueto family that controls the airline and Qatar Airways. LATAM presented the bankruptcy financing proposal in July, which prompted a challenge from other creditors, who even assembled a separate funding plan with investment bank Jefferies Group. The key dispute was over the propriety of the convertible loan.<br/>
Chile’s LATAM Airlines Group has appointed Marty St George to be its new chief commercial officer. St. George, who spent 13 years at JetBlue Airways before leaving the low-cost carrier in 2019, will begin his new role on 1 October, the airline said Thursday. He has more than 30 years’ of aviation industry experience and previously held positions at United Airlines and US Airways. He was also interim chief commercial officer for Norwegian Air. LATAM says St. George will lead the carrier’s commercial team, with responsibility for areas including sales, marketing, network development, alliances, LATAM Pass and cargo.<br/>