Aer Lingus has received another €200 million in loans from the Irish government, as it attempts to recover from heavy pandemic losses.
A second government loan
This week it was announced that the Irish carrier Aer Lingus will be receiving an additional €200 million bailout loan, in addition to the €150 million it received in late 2020. The latest three-year loan facility comes from the government-managed Ireland Strategic Investment Fund (ISIF). Aer Lingus Chief Financial Officer Elizabeth Haun commented:
“The increase in the available facility from ISIF to €350m provides additional resilience and, together with the airline’s focus on improving our cost efficiency and competitiveness, it is an important element as we plan our recovery.”
The Irish government is keen to prop up the airline because of the great benefit they bring to the Irish economy. Minister for Finance, Paschal Donohoe, said:
“Aer Lingus is a significant contributor to the Irish economy, both as an employer and as a vital link for Irish businesses exporting to global markets, for foreign direct investment into Ireland, and for our tourism and hospitality industries.”
Additionally, a regional subsidiary called Emerald Airlines has agreed to a €6 million loan from the ISIF.
The fledgling young carrier is planning new routes in the coming weeks as it begins to increase its operations. ISIF director Nick Ashmore said:
“Providing debt funding to the Irish aviation sector, through Aer Lingus and Emerald, will also help Ireland’s hospitality and leisure sectors by supporting a rebound in tourist traffic into Ireland and bringing more customers to these businesses.”
Considerable financial losses over the pandemic
The coronavirus pandemic hit the airline industry hard, and Aer Lingus has been heavily affected. Prior to Covid, the airline boasted annual profits of €276 million for 2019. In the two years following, the carrier has suffered considerable annual losses due to Irish travel restrictions. According to Haun:
“The pandemic has had a damaging impact on Aer Lingus’s business, causing operating losses of €347 million in 2021 and €361 million in 2020.”
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