LONDON (Reuters) - Britain has told airlines that state investment to help them survive the coronavirus crisis will only be considered once they have looked at the possibility of raising capital from existing investors, a person familiar with the situation said.
UK finance minister Rishi Sunak has written to airlines and airports to set out how they could benefit from a government help package for businesses set out last week, the person familiar with the situation said.
“The government expects the sector to look at raising capital from existing investors,” the person added.
UK-based airlines easyJet (EZJ.L) and Virgin Atlantic asked for government support earlier in March to help them survive a period when air travel has come to a standstill.
But IAG (ICAG.L), the parent company of British Airways, has not asked for any help and has long been a vocal opponent of state support for airlines.
easyJet has come under fire for asking for government support in the same week as it paid out 174 million pounds to shareholders in dividends.
The airline has said it was legally obliged to make the payment which was decided before coronavirus meant customer demand for travel dried up and it had to ground the majority of its fleet.
IAG declined to comment on the letter on Tuesday, while easyJet said it was reviewing the letter alongside the measures announced last week.
“Our immediate focus is on liquidity and protecting jobs and we are working with the government to make best use of these measures,” a spokeswoman for easyJet said by email.
Writing by William Schomberg, additional reporting by Sarah Young, editing by Estelle Shirbon
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March 24, 2020 at 10:35PM
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UK tells airlines to try raising own capital before state will help: source - Reuters
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