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Virgin Atlantic Begs British Government for £7.5 Billion in State Aid to Prop Up UK Aviation Industry

Virgin Atlantic Begs British Government for £7.5 Billion in State Aid to Prop Up UK Aviation Industry

Photo Credit: Virgin Atlantic

Sources claim the bosses of Virgin Atlantic are to write to the British Prime Minister, Boris Johnson pleading for at least £7.5 billion in State aid to prop up the UK’s aviation industry. Previously, the British government has shied away from helping struggling airlines and has allowed the likes of Monarch, Thomas Cook, and most recently Flybe to fall into bankruptcy.

While the idea of giving airlines taxpayer-funded handouts within Europe is closely controlled and generally frowned upon, the European Commission has indicated that such rules will be relaxed because of the unprecedented challenges caused by the Coronavirus outbreak. The EU has already relaxed airport slot rules allowing airlines to ground planes rather than fly so-called ‘ghost flights’.

Back to the Drawing Board as Virgin Atlantic Tries to Negotiate New Pay Deal for Cabin Crew
Photo Credit: Virgin Atlantic

Even without the rules being relaxed, European governments have found ways to offer financial support for embattled carriers. Most famously, Italy’s Alitalia has been in special administration for several years and has had millions of Euro’s pumped into its coffers to keep the airline afloat. The airline has not made a profit for at least two decades.

And the German government stepped in to offer financial support for Condor Airways, a subsidiary of the Thomas Cook group which the British government allowed to fail.

The British Chancellor unveiled a series of measures last week to support businesses during the Coronavirus crisis but the aviation industry – which has been one of the hardest-hit sectors – was seemingly forgotten.

The British Airlines Pilots Association (BALPA) slammed the oversight, saying that airlines “desperately” needed government help and warned UK aviation risked “being wiped out” by the pandemic following last weeks budget announcement.

Virgin Atlantic’s chief executive, Shai Weiss told staff on Friday that the airline needed to take “decisive steps to weather this storm.” Weiss described the last seven days as a “tough and exhausting” said that he would need to be “honest” with staffers about the gravity of the situation in an update due early next week.

The carrier has already grounded eight aircraft and more will likely follow. The update from Weiss came before Trump’s travel ban was extended to include the UK – Although, no doubt, he feared that this was always on the cards.

The chief executive of British Airways also said the airline would be “parking aircraft in a way that we have never had to before”. Alex Cruz warned that job losses would be inevitable.

In the United States, both Delta Air Lines and United have been in discussions with the White House for financial support.

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