International Consolidated Airlines Group (IAG), which owns British Airways, is considering going “cap in hand” to investors, says Oliver Gill in The Daily Telegraph. A €2.75bn (£2.5bn) rights issue is one way it could boost its cash reserves.
Other options include a share placing with major institutional investors or issuing loans that can be converted into shares. IAG has already sold £750m of Avios loyalty points for future flights to American Express. Meanwhile, trade unions Unite and GMB are angry because BA, which announced 12,000 redundancies in April, has refused to rule out asking staff to re-apply for their jobs. A “jumbo-sized” rights issue and “painful” job cuts are drastic measures that have already been factored into IAG’s share price and led to BA being called a “national disgrace”, says Alistair Osborne in The Times. But critics could do with some “perspective”. It is important to remember that IAG is competing with the “likes of Lufthansa and Air France-KLM”, which have already received €9bn and €10.4bn in state bailouts respectively. Self-help is surely better than “having the taxpayer refinance IAG, even if jobs are lost.
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