Continued from page 38 An industry source noted:


“The chancellor’s statement wasn’t the level of help that had been suggested.” However, Airlines UK policy


and public affairs director Rob Griggs said: “We’re very much still in dialogue. The government is open to more support. “There are a number of things


on the table to carry airlines though this crisis and to support aviation when it is over. “We’re talking to government


as a sector, and individual airlines are having discussions of their own. We do need more to make sure as many airlines as possible get through this in as good a shape as possible.” Iata called for “urgent action”,


warning UK airlines would be the worst hit in Europe, with passenger traffic across Europe forecast to fall by almost half on 2019. UK carriers alone could see 114 million fewer passengers year on year and lose almost $22 billion in revenue, Iata warned. Griggs pointed out: “The Iata figures show the UK is most-impacted.” However, the scale of UK


aviation and level of competition among airlines makes a government bailout challenging. Aid to one carrier is likely to


trigger demands from rivals or legal challenges on competition grounds. An industry source confirmed


the government is tussling with “the complexity of the competition in the UK, with a whole network of competing, privately owned airlines and airports”. A second source told Travel


Weekly: “Competition is behind the fact that the government is looking to have one-on-one conversations with airlines. There are complications around individual airlines and liquidity.”


Virgin seeks emergency loan from government


Ian Taylor


Virgin Atlantic has appealed to the government for an emergency loan and was awaiting a decision expected late this week or early next as Travel Weekly went to press. Any cash injection is likely to see


the carrier partially nationalised. Senior representatives of the


airline met Rothschilds, the financial advisory group working with the government on support for aviation, last Friday to present the case for a loan after chancellor Rishi Sunak ruled out a general bailout of the sector


but pledged to consider “bespoke support as a last resort” for carriers “having exhausted other options”. The chancellor made clear:


“Taxpayer support would only be possible if all commercial avenues have been fully explored including raising further capital from existing investors.” Should cash be made available,


Sunak added: “Terms would be structured to protect taxpayers’ interest.” It’s expected the government would take a stake reflecting the size of any loan, in the same way the Treasury took large stakes in several banks in 2008.


Virgin Group chairman Sir


Richards Branson offered to put $250 million into Virgin Group businesses last week, with more than $200 million to go to the airline. Delta Air Lines is understood to be prepared to provide an additional $100 million, subject to conditions attached to a $58 billion US government bailout of American carriers. Virgin Atlantic declined to


comment. However, an aviation industry source said: “Virgin Atlantic needs an emergency loan facility. The ball is now in the government’s court. It remains to be seen what they deem appropriate [and] what conditions are attached. It could involve a government stake in the airline.” That would dilute the ownership


of Branson and of Delta, which holds a 49% stake in Virgin Atlantic. Noting the chancellor’s


Virgin Atlantic could be part-nationalised


Administrator EY proposes Flybe be nationalised


The administrator of Flybe has reportedly approached the government to resurrect the failed carrier by nationalising it. Accountancy firm EY, which


was appointed administrator when parent consortium Connect Airways led by Virgin Atlantic put Flybe into administration on March 5, has asked ministers to


36 2 APRIL 2020


consider buying the regional carrier out of administration, according to The Sunday Telegraph. The report came after a group


representing more than 2,500 former Flybe workers wrote to the chancellor last week urging him to act so they could access the wage support for furloughed workers provided by the Treasury. Ministers have relaxed rules


allowing staff of companies which failed in March to benefit from the coronavirus wage support. However, Flybe appears to fit


few of the criteria for cash support outlined by the chancellor last week


Flybe failed on March 5


which include “raising capital from existing investors”. Flybe collapsed after failing to secure a £100 million bailout by the government when the owners of Connect Airways refused to provide further funds.


travelweekly.co.uk


stipulation that any support would be “as a last resort”, the source said: “Virgin hasn’t gone to the government lightly. You can draw your own conclusions.”


PICTURES: Phil Gammon; Steve Parsons; Theo Moye


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