Aer Lingus (EI, Dublin International) has agreed a new EUR200 million euro (USD220 million) loan with the Irish sovereign wealth fund, having already received a similar EUR150 million (USD165 million) debt facility from the Ireland Strategic Investment Fund (ISIF) last year, the fund revealed in a statement on March 22.
The new three-year debt deal brings the ISIF’s total funding commitment to the airline to EUR350 million (USD385 million) and “is designed to complement ongoing support” provided by parent company IAG International Airlines Group.
The facility, provided via the ISIF’s EUR2 billion (USD2.2 billion) Pandemic Stabilisation and Recovery Fund, aims to support the airline in its recovery from the impact of Covid-19. The fund and Aer Lingus have agreed commercial terms on the structure, pricing, and repayment of the loan.
ISIF has also agreed a EUR6 million (USD6.6 million) debt facility with Emerald Airlines (Ireland) (EA, Dublin International), which operates the Aer Lingus Regional franchise and commenced flight operations in late February. This “will support its launch and scale-up over the coming months,” the fund said, so that “when fully operational, Emerald Airlines is expected to bring over 500,000 tourists to the island every year while supporting over 400 Irish-based staff and over 250 indirect jobs.”
“Providing debt funding to the Irish aviation sector, through Aer Lingus and Emerald, will also help Ireland's hospitality and leisure sectors by supporting a rebound in tourist traffic into Ireland and bringing more customers to these businesses,” opined ISIF Director Nick Ashmore.
Aer Lingus CFO Elizabeth Haun said the pandemic had caused operating losses at the flag carrier of EUR361 million (USD397 million) in 2020 and EUR347 million (USD382 million) in 2021. In 2019, Aer Lingus had posted a EUR276 million (USD304 million) operating profit on revenue of EUR2.1 billion (USD2.3 billion).
IAG CFO Steve Gunning said last month that Aer Lingus had “probably had the toughest time of all of our operating companies” in 2021. The group also includes British Airways, Iberia, Vueling Airlines, and LEVEL. Ireland’s peripheral location and strict travel restrictions created an extremely difficult operating environment for the carrier, he explained.
