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(Adds CEO comment, background)
LONDON, July 31 (Reuters) - IAG, owner of British Airways,
said it planned to raise 2.75 billion euros in a capital
increase backed by its biggest shareholder Qatar Airways, to
strengthen its finances after the pandemic wiped out travel.
The chief executive of IAG said that the capital increase
would boost the group's liquidity, which at the end of June
stood at 8.1 billion, and put it in the strongest position
possible for a market that is unlikely to return to pre-pandemic
levels until 2023.
"We strongly believe that now is the time to look to the
future and strengthen IAG's financial and strategic position,"
CEO Willie Walsh said in a statement on Friday.
With international travel threatened by a new wave of the
pandemic before a recovery from the three-month grounding of
planes has got properly underway, the outlook for airlines
remains bleak.
IAG said that the capital boost would also enable it to
withstand a more prolonged downturn in its worst case scenario
planning. Reuters had previously reported the plan for a rights
issue.
The airline group, which also owns Iberia and Aer Lingus,
reported an operating loss of 1.365 billion euros for the second
quarter, broadly in line with a consensus forecast for a loss of
1.395 billion euros.
(Reporting by Sarah Young; editing by Kate Holton)
