Tells Carriers To Look For Relief From Shareholders
U.K. Chancellor of the Exchequer Rishi Sunak has told airlines in that country that a government bailout will be only a "last resort", and that they should exhaust all other options before turning to the government for help.
The message came in a letter from Sunak to aviation executives, according to a report from Business Travel News Europe. Sunak has told the carriers that they should first look to raise money from shareholders, and the government will only step in on a "case-by-case" basis as a last resort.
The International Air Transport Association (IATA) has said that the industry is on the verge of collapse unless governments intervene in a relatively short time. CEO Alexandre de Juniac said that some 2.7 million airline jobs are at risk, and each one supports another 24 jobs in the tourism sector.
In a news release, the Airport Operators Association (AOA) accused the U.K. government of "U-turning" on an aviation support package in light of the pandemic.
“After having publicly announced a support package for airports and airlines, we’re surprised by where we find ourselves today. Our industry will now have to fight on its own to protect its workforce and its future," said AOA CEO Karen Dee.
“With passenger numbers approaching close to zero, U.K. airports have seen a major drop in revenue. They are taking unprecedented steps to safeguard airport staff and operations through this crisis, which could include in some cases considering shutting down for a period of time. This could have major impacts for U.K. communities and businesses.
"We urge the Government to reconsider and at the very least provide a comprehensive package of support for airports and ground-based services, to ensure the UK’s critical aviation infrastructure is ready to take off once the COVID-19 pandemic recedes."
However, Tim Alderslade, Chief Executive of Airlines UK, the industry body representing UK-registered airlines the association welcomes the announcement that Government will enter into negotiations with individual airlines seeking additional support "recognizing 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.
“It is essential that the economy-wide measures announced thus far are implemented as quickly as possible, with accompanying further guidance, to support airlines through this unprecedented period and, alongside any additional bespoke or sector-wide measures, enable aviation to support a strong UK recovery from the current crisis in the months ahead.”
(Source: News releases and as cited. Image from file)
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