States rush to prop up airlines
Australia and Taiwan have joined the growing number of governments offering financial aid to airlines, while authorities in Europe rushed to agree steps to rescue carriers which have had to park planes and cut jobs as the coronavirus pandemic puts the brake on travel.
The scramble to bail out carriers came as Italy once again rescued Alitalia, with Rome taking control of the airline, and shelving a sale process for the perennially loss-making carrier.
EU transport ministers discussed potential help following calls from the airline sector for urgent tax relief to avoid multiple bankruptcies.
Norway’s government held talks with Norwegian Air executives after the struggling airline called for financial backing similar to that given to regional counterpart SAS by Denmark and Sweden.
In the United States, airlines have asked Washington for more than $50bn (€46bn) in grants and loans, plus tens of billions in tax relief.
Airbus has signalled some government support may be needed if the coronavirus crisis lasts for several months, three people familiar with the matter said.
The Australian government said it would refund and waive charges to airlines such as domestic air traffic control fees as it advised citizens against all foreign travel.
Taiwan’s civil aviation regulator said that its airlines could apply for subsidies and loans backdated to January.
The outbreak of the flu-like virus has wiped 41%, or €145bn, off the share value of the world’s 116 listed airlines, with many using up their cash so fast that they can now cover less than two months of expenses, a Reuters analysis showed.
The International Air Transport Association (IATA) representing the sector said €185bn in government support could be needed worldwide.
Airlines have been forced to take drastic measures to cut their costs.
Emirates and El Al Israel Airlines asked staff to take unpaid leave, and Vietnam Airlines and Vietjet Air will suspend flights to major Southeast Asian and European destinations.
Reuters
