Chancellor tells airlines that the government will…

Chancellor tells airlines that the government will not bail them out, due to Covid-19 crisis
2020-03-26 07:35:00
Rishi Sunak, the chancellor, has written to the airlines and airports, warning that there would be no sector-wide rescue to prevent companies going out of business because of coronavirus. He insisted that further taxpayer support for the sector would only be possible once they had “exhausted other options” including raising money from shareholders, investors and banks. Companies have been told to access funding already announced last week, including monthly payments of up to £2,500 for every employee temporarily laid off because of the crisis. In his letter he said that airlines and airports could only seek “bespoke” support from the Treasury as a “last resort”, with no guarantee of further help. The comments follow criticism levelled at Easyjet after it paid shareholders £174 million in dividends last week, despite appealing for taxpayer support. Sir Richard Branson, has also been attacked after the airline told staff to take 8 weeks of unpaid leave. He has since promised to invest £215 million to support his Virgin Group business. Many airlines may go bankrupt due to the virus crisis. Some of the smaller airports may close, and larger airports partly close temporarily. .Tweet     Don’t expect us to bail you out, Rishi Sunak tells airlines By Graeme Paton, Transport Correspondent  Ben Clatworthy, Assistant Travel Editor | Charlotte Wace Tuesday March 24 2020 (The Times) Airports may have to close temporarily after the government ruled out a comprehensive state bailout for the aviation industry, ministers were told today. Rishi Sunak, the chancellor, wrote to the airlines and airports this afternoon, warning that there would be no sector-wide rescue to prevent companies going out of business because of coronavirus. In a letter seen by The Times, Mr Sunak insisted that the aviation industry was “vital” to the nation’s economic recovery and to rescue Britons stuck overseas. However, he said that further taxpayer support for the sector would only be possible once they had “exhausted other options” including raising money from shareholders, investors and banks. Companies have been told to access funding already announced last week, including monthly payments of up to £2,500 for every employee temporarily laid off because of the crisis. In his letter he said that airlines and airports could only seek “bespoke” support from the Treasury as a “last resort”, with no guarantee of further help. The comments follow criticism levelled at Easyjet after it paid shareholders £174 million in dividends last week, despite appealing for taxpayer support. Sir Richard Branson, the billionaire owner of Virgin Atlantic, has also been attacked after the airline told staff to take eight weeks of unpaid leave. He has since promised to invest £215 million to support his Virgin Group business. It is believed that the lack of a deal may also be linked to significant disparities between individual airlines and the fact that many are foreign owned. International Airlines Group – parent company of British Airways – is registered in Spain and its biggest shareholder is Qatar Airways. Hundreds of thousands of British holidaymakers face being trapped overseas as airlines have begun grounding their fleets. Ryanair confirmed that it expected that most of its flights would now be cancelled u

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