Responding to calls for an aid package for the industry that would include airlines and airports, Chancellor Rishi Sunak told UK airlines an industry-wide bailout would only be considered as a last resort and that instead they should seek other ways to survive the coronavirus crisis.
The Chancellor shared his decision in a letter posted on Twitter.
Companies were told to explore the possibility of raising funds from other sources, including existing investors.
He said: “We would expect all companies to be pursuing all possible actions to preserve cash and maximise liquidity, including engaging with shareholders, lenders and the markets, and utilising all available assets and facilities.”
Airlines were also told that taxpayer support would only be possible ‘if all commercial avenues have been fully explored, including raising further capital from existing investors’.
The letter came as airline body IATA thanked those governments that have already pledged support for the industry and urged others to follow suit ‘before more damage is done’.
Alexandre de Juniac, IATA Director General and CEO said: “Airlines are fighting for survival in every corner of the world. Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business. For airlines, it’s apocalypse now. And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry.”
Karen Dee, Chief Executive of the Airport Operators Association, said the UK Government’s decision would leave airports struggling to provide critical services and will hamper the UK recovery.
“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,” she said.
“With passenger numbers approaching close to zero, UK 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 UK communities and businesses.
“While countries across Europe have recognised the vital role airports play and are stepping into the breach, the UK Government’s decision to take a case-by-case approach with dozens of UK airports is simply not feasible to provide the support necessary in the coming days.
“Not only does the decision leave airports struggling to provide critical services, it will hamper the UK recovery.
“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.”