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Coronavirus: Virgin Atlantic to seek bailout in coming days | Coronavirus: Virgin Atlantic to seek bailout in coming days |
(30 minutes later) | |
Virgin Atlantic is expected to ask for a government bailout worth hundreds of millions of pounds in the coming days, the BBC understands. | Virgin Atlantic is expected to ask for a government bailout worth hundreds of millions of pounds in the coming days, the BBC understands. |
Requests for state aid are also expected from other airlines. | Requests for state aid are also expected from other airlines. |
The Government has said it will only step in to help struggling airlines "as a last resort" on a case-by-case basis. | |
However, the Transport Secretary told MPs he can't rule out the state taking an ownership stake in UK airlines that have been battered by coronavirus. | |
Grant Shapps told MPs on the Transport Select Committee that nothing had been ruled out in its response to coronavirus for the aviation sector. | |
Asked by Labour MP Ruth Cadbury if the Government would consider buying a share of UK airlines that face collapse, Mr Shapps said: "It was important to save companies that would survive in normal times. | |
However, the Transport Secretary said current shareholders "must be part of the solution". | |
UK-based airlines have already announced measures to save money such as temporarily laying-off staff. | UK-based airlines have already announced measures to save money such as temporarily laying-off staff. |
Virgin Atlantic had previously suggested the Government offer UK carriers £7.5 billion in credit facilities. | Virgin Atlantic had previously suggested the Government offer UK carriers £7.5 billion in credit facilities. |
The airline's founder Sir Richard Branson this week offered to inject £250 million into the Virgin Group, with most of that amount going to the airline. | The airline's founder Sir Richard Branson this week offered to inject £250 million into the Virgin Group, with most of that amount going to the airline. |
Turbulent times | |
The vast bulk of flights to and from the UK have been grounded amid the coronavirus pandemic. | The vast bulk of flights to and from the UK have been grounded amid the coronavirus pandemic. |
Some airlines like British Airways are still operating a number of rescue flights to bring stranded Brits home. | Some airlines like British Airways are still operating a number of rescue flights to bring stranded Brits home. |
Earlier this week, the government said it would not deliver a financial aid package for the aviation industry, but its emergency business measures, including a Bank of England scheme for firms to raise capital and employee wage subsidies, were available for airlines. | Earlier this week, the government said it would not deliver a financial aid package for the aviation industry, but its emergency business measures, including a Bank of England scheme for firms to raise capital and employee wage subsidies, were available for airlines. |
But industry group the International Air Transport Association (IATA) warned of an "apocalypse" in the aviation sector as it called on governments around the world for help. | But industry group the International Air Transport Association (IATA) warned of an "apocalypse" in the aviation sector as it called on governments around the world for help. |
The US Senate on Wednesday passed a $58 billion (£46.6 billion) aid package for its airline industry, which included cash for paying pilot, crew and staff salaries. | The US Senate on Wednesday passed a $58 billion (£46.6 billion) aid package for its airline industry, which included cash for paying pilot, crew and staff salaries. |
To bail out, or not bail out? | To bail out, or not bail out? |
You'd be forgiven for being confused about whether the Government is going to bailout UK-based airlines, or not. | You'd be forgiven for being confused about whether the Government is going to bailout UK-based airlines, or not. |
First ministers indicated that an industry-wide bailout was on the cards. | First ministers indicated that an industry-wide bailout was on the cards. |
Virgin Atlantic went public and said £7.5bn was needed. | Virgin Atlantic went public and said £7.5bn was needed. |
But then an about turn from the Chancellor. | But then an about turn from the Chancellor. |
Rishi Sunak wrote to airlines and airports telling them that an industry-wide emergency rescue package for the aviation industry wasn't on its way after all. | Rishi Sunak wrote to airlines and airports telling them that an industry-wide emergency rescue package for the aviation industry wasn't on its way after all. |
What the Government is offering is bespoke financial support on a case-by-case basis, but only once airlines have exhausted all other options. | What the Government is offering is bespoke financial support on a case-by-case basis, but only once airlines have exhausted all other options. |
Ministers want to be sure that wealthy shareholders play their part. | Ministers want to be sure that wealthy shareholders play their part. |
The other reason an industry-wide package didn't happen was because the airlines involved are ultimately rivals and where as some of them were champing at the bit for a Government loan, others were against it. | The other reason an industry-wide package didn't happen was because the airlines involved are ultimately rivals and where as some of them were champing at the bit for a Government loan, others were against it. |
The more cash-rich the airline, the less keen on a bailout. | The more cash-rich the airline, the less keen on a bailout. |
And, for some, cash is the immediate problem. | And, for some, cash is the immediate problem. |