Following months of talks, Volotea (V7, Asturias) says it has secured a five-year, syndicated loan for EUR150 million euro (USD171.6 million) intended at helping the privately-owned LCC through the COVID-19 crisis.

In a statement, Volotea said the five-year loan had been secured through a consortium of eight financial institutions led by Banco Santander alongside CaixaBank, the state-owned Instituto de Crédito Oficial (ICO), Bankinter, Liberbank, BBVA, Ibercaja, and the Institut Català de Finances (ICF). ICO will gaurantee the loan which has been granted under the terms of the European Commission's State Aid Temporary Framework adopted in March to mitigate the pandemic's economic impact. This funding, which is similar to the financial support granted recently to other Spanish airlines, will cover Volotea's financial and operational cash needs.

"Volotea has been profitable for the last five years, has one of the most flexible strategies in the market, has one of the most efficient fixed- variable cost ratio in the sector, and has carried on reducing its fixed costs as it pursues ongoing improvements to enhance its competitiveness. Moreover, the company will review its targets to improve its cost base for the next two to three years even further, adapting to the current scenario of weak demand, in order to increase its competitiveness," it said.

Following three months of inactivity due to the pandemic, Volotea restarted operations on June 16 launching 40 new routes (including 15 exclusive ones) across all European countries in which it has a base. In Spain, Volotea has introduced 15 new connections, has doubled the number of aircraft at its Asturias and Bilbao bases, and has broadened the scope of its operations adding two new airports: Santiago de Compostela and Granada.

Aside from shoring up its capital reserves, the LCC plans to use the loan to strengthen its position in Spain where, by virtue of IAG International Airlines Group's planned takeover of Air Europa (UX, Palma de Mallorca), it will open two to four new bases and operate multiple new routes.