Privately run British Airways said Friday it planned to raise £600 million ($985 million) in cash in a bid to manage its way through "the current difficult trading conditions." The cash, BA said, ought "to ensure it has strong liquidity."
CEO Willie Walsh told reporters that the increased liquidity "puts to bed any suggestion that BA is in any sort of risk short term." Walsh has stressed repeatedly in recent times that the airline is in a "fight for survival."
In a statement the carrier said it has launched a £300 million convertible debt issue. Additionally, the carrier has agreed to terms with the trustees of its defined benefit pension programmes in the UK "to release some bank guarantees back to the airline. These guarantees were provided in 2006 and were accessible by the trustees, but only in the event of the airline's insolvency."
According to BA, the understanding with the trustees should make available "up to" £330 million in bank facilities, from which the airline can withdraw cash "at any time" through 21 June 2012.
As of 30 June the carrier had approximately £1.25 billion in cash.
It said that the new funding will bring its liquidity to about £2 billion. "We're taking action to improve our liquidity and strengthen our position within the industry," Walsh said. "This goes hand-in-hand with our cost reduction and efficiency initiatives which are designed to create the right conditions for our sustainable, long-term profitability."