Business / Loganair hopes £25m loan facility will help see it through pandemic
THE IMPACT of the coronavirus pandemic on the aviation sector has been highlighted after it was revealed that Loganair signed a £25 million loan facility in July.
The regional airline, which serves the Highlands and Islands among other routes in the UK, secured the money via the government’s Coronavirus Large Business Interruption Loan Scheme.
The scheme helps medium and large sized businesses to access loans and other kinds of finance up to £200 million.
Loganair, meanwhile, has made changes to its flying schedule for February as a direct result of the new lockdown restrictions across the UK.
The airline said anyone whose flight is affected will receive an email confirming their options.
Travel in and out of Shetland at the moment is restricted to essential purposes, and the only routes being served at the moment are Aberdeen and Kirkwall.
Loganair’s parent company Airline Investments Limited said in accounts published in November that a sharp drop in bookings allied with refunds having to be processed “made it necessary for Loganair to find additional financing”.
A spokesperson for Loganair said that the loan facility was also taken out to help with the airline taking on routes following the demise of Flybe and Flybmi.
They said: “On 1 July 2020, Loganair signed a £25 million CLBILS [Coronavirus Large Business Interruption Loan Scheme] facility with Clydesdale Bank.
“The purpose of this new facility was to provide the financial footing for Loganair to both recover from the Covid-19 pandemic, but also prepare for the growth opportunities created following the absorption of activities from flybmi and Flybe.”
Shareholders of Airline Investments Limited also provided an additional loan of £1.64 million, while the group exercised its purchase option in respect to three Embraer 145 aircraft previously held on lease.
Airline Investments Limited’s board said it felt that “Loganair has in place the financial resilience to see it through this period”.
The accounts also state that Loganair’s “assumption is that the impact of Covid-19 will lead to a long-term reduction in demand for its services”.
It has prepared a two-year financial model through to 31 March 2022.
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