British Airways boosted its cash reserves on Monday by delaying £450 million ($630m) in pension payments, as it looks to conserve funds amid the Covid-19 pandemic. The carrier’s owner IAG also said the airline will draw down a £2bn government-backed loan agreement with a syndicate of banks by the end of this month. The five-year facility, first unveiled in December, will be partially guaranteed by UK Export Finance. “British Airways has reached agreement with the Trustee of New Airways Pension Scheme to defer £450m of pension deficit contributions due between October 2020 and September 2021,” BA said in a statement on Monday. The aviation sector has been hammered by the pandemic, with <a href="https://www.thenationalnews.com/business/aviation/2021-air-travel-recovery-at-risk-from-new-covid-mutations-and-restrictions-iata-says-1.1159975">global passenger traffic falling by nearly two-thirds in 2020</a> from the previous year, making it the worst year in aviation history for travel demand, according to the International Air Transport Association. The steepest decline came in April, while a slight recovery during the summer stalled in the autumn and winter when new lockdown measures were put in place across the globe due to new virus variants. With Covid lockdowns persisting across the globe, carriers are looking for ways to preserve cash and bolster liquidity while flights remain impractical. BA has raised total liquidity by £2.45bn through its pension deferments and final approval on its loan. The carrier will defer £37.5m in monthly contributions due between last October and September this year after a striking a deal with the trustee of its New Airways Pension Scheme. Under the agreement, BA will also suspend dividend payments to parent IAG until the end of 2023. The £450m of accumulated contributions plus interest will now be repaid monthly in a revised scheme to March 2023, adding to the end of the existing recovery plan. "In addition to these arrangements, IAG continues to explore other debt initiatives to improve further its liquidity," IAG said. BA’s finances have been battered by the pandemic and analysts expect IAG's quarterly results on Friday to show a £1.07bn loss for the fourth quarter of 2020. Shares in IAG are trading down 55 per cent from where they were this time last year, but news of the extra liquidity helped them rise 2.02 per cent to £1.69 at 12.39pm London time. BA is IAG's biggest and most profitable airline and the pause in dividends from it means it could be years before IAG shareholders see payments again.