British Airways unveiled a $1 billion fundraising aimed at securing its future, including $540 million in bank loans that had been earmarked for its pension funds as a safety net against the airline going bust. The cash removes any immediate threat to the struggling carrier as it endures one of the aviation sector’s worst ever downturns coupled with competition from budget carriers, Chief Executive Willie Walsh told reporters.
The company, with a pension deficit estimated at over 3 billion pounds ($4.9 billion), said pension fund trustees had agreed the best way to prevent BA going to the wall was for bank guarantees provided in 2006 to be handed back. These guarantees were accessible by the trustees only in the event of the airline’s insolvency.