Deferred Pension Contributions
For the second agreement, BA finalized talks with the New Airways Pension Scheme (NAPS) Trustee. The airline requested that the pension deficit contributions totaling £450m (US$630m) due on a monthly basis between October 2020 and September 2021 be postponed.
The two parties decided that, as a monthly reimbursement, the British carrier would apply the deferred sum plus interest to the end of the airline’s current recovery plan, which is expected to run until the end of March 2023.
For the deal, BA provided property assets as security for the deferred payments. In addition, BA will not pay any dividends to IAG until the end of 2023. As per the Aerotime report, starting from 2024, “any dividends paid will be matched by contributions to NAPS of 50 percent of the value of dividends paid.”
“If a new Recovery Plan has not been agreed by 30 September 2021, the default position is that British Airways will return to making payments of £37.5m (US$52.5m) per month from October 2021,” read the IAG release.
Featured image: British Airways G-STBK Boeing 777-336(ER). Photo: Ervin Eslami/Airways
MIAMI – British Airways (BA) has completed talks on two funding agreements to raise the liquidity of the airline by £2.45bn (US$3.4bn).
The first funding involves a £2bn (US$2.8bn) loan, as BA concluded talks with the UK Export Finance (UKEF), the export credit agency of the British government. The five-year term Export Development Guarantee loan will be partially guaranteed by UKEF and endorsed by a “bank syndicate,” according to an IAG release, BA’s parent company.
As reported by aerotime.aero, the release states that “The British airline expects the facility to be decommissioned before the end of February 2021.”
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Source:: “Airways Magazine”