Page 1 of 1

Iberia & Vueling secure €1 Bil Spanish gov't loans

Posted: Fri May 01, 2020 11:30 am
by Westerwaelder
https://www.nytimes.com/reuters/2020/05 ... -debt.html

Interesting move given the noises they made lately. What's behind this?

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 11:53 am
by mattyfitzg
My first thoughts are that they (BA/IAG) are reluctant to take a loan from HMG because this would open up the door for Virgin to take one too, but accepting one from the Spanish government has no such effect.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 12:41 pm
by mmo
Sorry to be a nitpicker, but, IAG did not get the loan, Iberia and Vueling did. Re-read the source you provided and you will see in the first line it says exactly what I wrote. Suggest you change the title.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 12:48 pm
by RexBanner
Who’s the parent company that holds the shares of both companies? There’s your answer. How they proportion that money is up to them.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 1:08 pm
by VolvoBus
RexBanner wrote:
Who’s the parent company that holds the shares of both companies? There’s your answer. How they proportion that money is up to them.


"The agreement is part of the legal framework established by the Spanish government to mitigate the COVID-19 economic impact" Paragraph 4 of the NYT article.

Do you really think the directors of Iberia and Vueling are going to onlend the money to BA and/or Aer Lingus and risk criminal prosecution?

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 1:09 pm
by DobboDobbo
mattyfitzg wrote:
My first thoughts are that they (BA/IAG) are reluctant to take a loan from HMG because this would open up the door for Virgin to take one too, but accepting one from the Spanish government has no such effect.


I think that is almost certainly the case - BA will wait for VS to go under before seeking assistance in the UK.

If VS obtain assistance, BA know they have the safety net (at a price no doubt) but that would make it harder for them to shed the volume of staff they are currently trying to shed.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 1:23 pm
by Thomaas
VolvoBus wrote:
RexBanner wrote:
Who’s the parent company that holds the shares of both companies? There’s your answer. How they proportion that money is up to them.


"The agreement is part of the legal framework established by the Spanish government to mitigate the COVID-19 economic impact" Paragraph 4 of the NYT article.

Do you really think the directors of Iberia and Vueling are going to onlend the money to BA and/or Aer Lingus and risk criminal prosecution?


Subsidizing Ibera/Vueling essentially means more internal funds left for BA and Aer Lingus. Pretty hypocritical of BA to lobby against a subsidy for Virgin Atlantic.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 1:36 pm
by Westerwaelder
mmo wrote:
Sorry to be a nitpicker, but, IAG did not get the loan, Iberia and Vueling did. Re-read the source you provided and you will see in the first line it says exactly what I wrote. Suggest you change the title.


Pretty much every article states that it is IAG that secured the loan - for their Spanish subsidiaries. I would interpret this as IAG negotiating on behalf of their Spanish airlines. The title doesn't state to "gets" the loan.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 2:04 pm
by davidjohnson6
There are all kinds of ways for IAG to move funds between their different airlines if they really want to - very difficult to argue in court against things like management charges, licencing fees, the way head office expenses gets charged out, etc...

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 2:11 pm
by Aisak
Thomaas wrote:
VolvoBus wrote:
Do you really think the directors of Iberia and Vueling are going to onlend the money to BA and/or Aer Lingus and risk criminal prosecution?


Subsidizing Ibera/Vueling essentially means more internal funds left for BA and Aer Lingus. Pretty hypocritical of BA to lobby against a subsidy for Virgin Atlantic.


Exactly what internal funds are we talking about?
IAG does not run any business. It’s just a holding company. All funds come from dividends from the OpCos (and subsidiaries: Avios Ltd, GBS...). And maybe from the “selling of corporate services” to its own subsidiaries... but there is no other source of income for IAG SA as a holding that I can think of...

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 2:24 pm
by tobsw
The loans are ring-fenced anyway.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 2:51 pm
by jonas12345
BA will also be trying to secure funds like this on offer from the Bank of England, similar to the €600m that easyjet got recently. When they talk about state aid, they are talking about exclusive grants to companies (such as what AF and LH are getting), not about loans that are part of a business continuity scheme on commercial terms that would have been offered pre-Covid. This is what IB and VY have received

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 3:35 pm
by YIMBY
davidjohnson6 wrote:
There are all kinds of ways for IAG to move funds between their different airlines if they really want to - very difficult to argue in court against things like management charges, licencing fees, the way head office expenses gets charged out, etc...


All those are already under scrutiny. Internal transfers have been known to be a way to avoid taxes and therefore tax offices are very strict on those. All movements of funds have to be declared and justified. The international companies have some burden of evidence to prove the reason of internal transactions. There are EU wide regulations, though I do not know if Brexit waives some of those.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 4:18 pm
by mmo
RexBanner wrote:
Who’s the parent company that holds the shares of both companies? There’s your answer. How they proportion that money is up to them.


Westerwaelder wrote:
mmo wrote:
Sorry to be a nitpicker, but, IAG did not get the loan, Iberia and Vueling did. Re-read the source you provided and you will see in the first line it says exactly what I wrote. Suggest you change the title.


Pretty much every article states that it is IAG that secured the loan - for their Spanish subsidiaries. I would interpret this as IAG negotiating on behalf of their Spanish airlines. The title doesn't state to "gets" the loan.


https://www.bloomberg.com/news/articles ... cated-loan
https://www.businesstraveller.com/busin ... ked-loans/
https://www.nytimes.com/reuters/2020/05 ... -debt.html

I could go on and on. The loans are strictly for IG and YV and not for IAG. If you read the references the OP posted, they say the exact same thing. They refer to IAG setting the loans up, but the NYT and Bloomberg don't quite read the same. EL PAIS has an article which states the loans were arranged by both airlines and there is no mention of IAG.

I can assure you, as has been already pointed out, IAG has no fingers in the pie on these loans. They are strictly for the named airlines.

To eagles94, if you took the time to read the posts you would come to the same conclusion instead of just posting dribble and wrong dribble too.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 4:40 pm
by Westerwaelder
mmo wrote:
RexBanner wrote:
Who’s the parent company that holds the shares of both companies? There’s your answer. How they proportion that money is up to them.


Westerwaelder wrote:
mmo wrote:
Sorry to be a nitpicker, but, IAG did not get the loan, Iberia and Vueling did. Re-read the source you provided and you will see in the first line it says exactly what I wrote. Suggest you change the title.


Pretty much every article states that it is IAG that secured the loan - for their Spanish subsidiaries. I would interpret this as IAG negotiating on behalf of their Spanish airlines. The title doesn't state to "gets" the loan.


https://www.bloomberg.com/news/articles ... cated-loan
https://www.businesstraveller.com/busin ... ked-loans/
https://www.nytimes.com/reuters/2020/05 ... -debt.html

I could go on and on. The loans are strictly for IG and YV and not for IAG. If you read the references the OP posted, they say the exact same thing. They refer to IAG setting the loans up, but the NYT and Bloomberg don't quite read the same. EL PAIS has an article which states the loans were arranged by both airlines and there is no mention of IAG.

I can assure you, as has been already pointed out, IAG has no fingers in the pie on these loans. They are strictly for the named airlines.

To eagles94, if you took the time to read the posts you would come to the same conclusion instead of just posting dribble and wrong dribble too.


We all get it. But there is no doubt about IAG SECURING the loans - for its subsidiaries. Iberia and Vueling get the money, IAG did the negotiating. Even your own Bloomberg article mentions that IAG "tapped" the Spanish government a in the first line. You didn't have to go very far past the headline. NY Times reads differently but is this really worth so much fuss? This is fast becoming a forum of "I know better" types. Are you all retired school teachers (no offence to retired school teachers intended). Just scouring pages to find a word out of place to fire off a salvo of "you made a mistake" responses? Key thing here is, Iberia and Vueling getting government backed loans after IAG declaring publicly they had enough money to ride this out for some time to come.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 5:25 pm
by Vicenza
DobboDobbo wrote:
mattyfitzg wrote:
My first thoughts are that they (BA/IAG) are reluctant to take a loan from HMG because this would open up the door for Virgin to take one too, but accepting one from the Spanish government has no such effect.


I think that is almost certainly the case - BA will wait for VS to go under before seeking assistance in the UK.

If VS obtain assistance, BA know they have the safety net (at a price no doubt) but that would make it harder for them to shed the volume of staff they are currently trying to shed.



Usual such disgraceful tactics by BA, so nothing really new there.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 5:50 pm
by tobsw
It´s free money, so why not take it to pay off other (more expensive) loans?

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 8:56 pm
by olle
IAG is a spanish company? Then the spanish government help them.

Brittish arirways is then a spanish owned entity. Special after brexit.

Re: IAG secures $1.1 billion government backed loan in Spain

Posted: Fri May 01, 2020 10:47 pm
by Aisak
tobsw wrote:
It´s free money, so why not take it to pay off other (more expensive) loans?

Yeah... and better take it now while the offer is still on the table.

Wizz Air got a similar deal securing quite cheap money from the UK, since they legally can...

https://www.headforpoints.com/2020/04/2 ... t-bailout/