The UK chancellor has told airlines and airports not to expect an industry-wide bailout but instead that rescue deals would be formed on an individual basis. Rishi Sunak wrote to airlines yesterday (March 24) detailing that extra measures for the industry would only be used “as a last resort”.
The correspondence, which was shown to the Financial Times, reveals that further taxpayer support would be available once all avenues had been explored, including raising further capital from existing investors. Sunak, who was promoted during a cabinet reshuffle in February, said that bespoke support would be “structured to protect taxpayers’ interests.”
Tim Alderslade, chief executive of Airlines UK, the industry body representing UK-registered airlines, said: “We welcome the announcement that the government will enter into negotiations with individual airlines seeking additional bespoke support, recognising the fundamental importance of the aviation sector to the UK economy and the particular challenges faced by airlines in the face of travel restrictions that have all but eliminated airline revenue, but not airline costs, which are substantial and not solely restricted to wages.”
This afternoon, while speaking in the House of Commons during prime minister’s questions, Boris Johnson reiterated the government’s position: “We’re in regular contact with the aviation sector doing everything that we can to help...but I can assure you that there are other contacts going on as we speak,” he declared.
The British Airline Pilots Association (BALPA) confirmed that talks were ongoing with airlines and the government to look at how best to support the aviation industry through the COVID-19 crisis.
Brian Strutton, BALPA general secretary, added: “I’ve said before that there is no ‘one size fits all’ solution, due to the different structures and needs of each airline.
“Each airline will need to be reviewed to ensure a good use of taxpayers money. The government will be looking at areas such as the airline’s financial state, whether it could raise the cash in other ways, or if it’s crucial to the UK transport system. These deliberations still are ongoing so we should await the outcomes,” he added.
Last week, Virgin Atlantic appealed to the government for support comprising emergency credit facilities to the value of £5-7.5bn and slot alleviation for the full summer 2020 season.
A Virgin spokesperson, commented: “With this support, airlines including Virgin Atlantic, can weather this storm and emerge in a position to assist the nation’s economic recovery and provide the passenger and cargo connectivity that business and people across the country rely on.”