Icelandair has terminated its government-guaranteed credit facility, which has been in effect since September 2020. The airline stated Monday that it had “successfully navigated the turbulent two years since the onset of the pandemic” and that its financial position was strong.
Government guarantee
On September 15, 2020 – in the wake of pandemic-induced losses – Icelandair entered into an agreement with Íslandsbanki, Landsbanki, and the Icelandic government for a credit facility of up to $120 million, with a 90% government guarantee. The agreement stipulated a two-year drawdown period, in effect until September 15, 2022.
(A credit facility is a type of loan made in a business or corporate-finance context. It allows the borrowing company to take out money over an extended period instead of reapplying for a loan each time.)
The credit facility, Icelandair held, was “vital to complete the financial restructuring, enabling the company to maintain valuable know-how, and preserve the infrastructure necessary for an efficient ramp-up of its operations post-Covid.”
Successfully navigated the turbulent two years
On Monday, February 7 – seven months before the end of the drawdown period – Icelandair formally terminated its government-guaranteed credit facility. The termination is effective 15 days from Monday.
In a statement released Monday, Icelandair Group asserted that the airline had “successfully navigated the turbulent two years since the onset of the pandemic resulting in a strong financial position at year-end 2021.”
The airline hopes this solid financial position will support its 2022 flight schedule – with three new leisure destinations in Europe and resumed service to Montreal – and its continued recovery.
