It is state aid, if the Govt charges a lower fee for the guarantee, than a commercial (non-state) bank would charge.
It means that BA (or IAG) can borrow money from other lenders at a cheaper interest rate than they would achieve otherwise - a bank lender knows that whatever happens, the loan will still be repaid and thus the risk is significantly lower
If I have a good credit rating, a credit card issuer is more likely to offer me a credit card with a low interest rate; if I am a toerag with a string of CCJs to my name and a history of not paying the mortgage payment each month, I can expect a credit card issuer to take a somewhat different approach. The same principle applies to airlines - those which are very low risk are charged low interest rates on loans, while airlines perceived to be at greater risk have to pay high interest rates on loans. Right now, IAG is not a particularly good credit risk from a bank's perspective, particularly in the knowledge that 2020 was not a good year for them and they probably desperately need a loan to keep going