which airlines service iag?

Ivn San Félix, an analyst at Renta 4, says that the available cash should be enough to last through the next few months and hold out until the market recovers.

"We do not contemplate that IAG needs additional financing for a significant amount," continues the expert from the Spanish investment bank, who stresses that "this is especially relevant after the net debt has increased by almost 5,000 million euros in the last 12 months up to 12,400 million and that the company has advanced some income and delayed payments (pending) and investments (in fleet, mainly)".

It is relevant in comparison with the rest of the European airlines, which are in a more compromised situation and we believe that they will continue to be more dependent on receiving funds to finance their operations and that in some cases they will have to refinance debt again.

The high consumption of cash could lead to a capital increase and debt restructuring for Air France-K.

There is a risk that the balance sheet will need to be restructured if the sale of assets is approved. The group that is expected to increase its profits the fastest in the recovery could possibly refinance a bond of 850 million euros.

IAG issued convertible bonds for 825 million euros on May 18 as one of the latest measures to face the end of the crisis. This type of debt can be used to strengthen the balance sheet and to benefit from a recovery in demand, according to the company.

IAG has taken various measures to strengthen its finances. "A plan to reduce expenses and investments and measures to obtain financing (bond issues, capital increase, granting of loans from government authorities), collection advances (agreement with American Express) and delay payments (pension plan between October 2020 /September 2021)", summarizes Iván San Félix, from Renta 4.

Following this deployment, market consensus estimates from FactSet show that IAG's leverage (net debt/earnings) will be 3.3x by 2022, the first full year (or almost) of air traffic rebuilding, and that it will drop to 2.2 in 2023, the lowest ratio when measured against its main competitors, Air France-KML and Deutsche Lufthansa.

Some forecasts that contrast with IAG's delay in the stock market compared to the sector, and that Goldman Sachs believes that IAG's greater dependence on EU- United Kingdom and transatlantic trips will slow the recovery.