Aviation magnates have to cough up: ministers say shareholders should contribute to the rescue operation
Aviation magnates will have to put their hands in their pockets if they want bail, transport secretary Grant Shapps warned yesterday.
The industry has argued for state aid after being crippled by the Covid-19 pandemic. Virgin Atlantic, part of Sir Richard Branson’s business empire, has sparked calls for a £ 7.5 billion bailout.
This includes cash advances that are not repayable until the airlines have recovered.
Hands off: The airline argued for state aid after being crippled by the Covid-19 pandemic
Founded by another super-rich entrepreneur Sir Stelios HajiIoannou, and the regional airline Loganair, controlled by the closed Bond brothers, Easyjet have also begged for help from the government.
But since British Airways has suspended all flights to and from London Gatwick – after Easyjet had to ground its entire fleet on Monday – ministers are struggling to find alternatives to a taxpayer, insiders say they are keenly aware of the need to help those who have made fortunes in the good times with the airline industry ‘sharing the pain’ with taxpayers.
Shapps said there are “detailed discussions” with airlines, airports and “support services”, including specialist companies employing airport staff.
Sir Richard Branson (pictured with burlesque star Dita Von Teese) has pledged £ 215 million from his personal fortune and Virgin Group’s treasury to help save the airline
In BBC Radio 4’s Today program, he said, “We want competition in the aviation market.
“We think that’s absolutely right when we get out of this crisis to let it be there. That said, we are also very aware that many of the major airlines have shareholders who are also expected from the public to put their hands in their pockets.
For example, it cannot be right for shareholders to benefit in the good times and for the taxpayers to pay in the bad times. So we have to find that balance right. ‘
He added that “it is a matter of finding the right solutions from the whole wide range of packages announced by the Chancellor.”
Ministers are aware that a direct airline rescue would be politically toxic and seen by many as a special treatment for the super-rich.
Easyjet founder Sir Stelios HajiIoannou has been bullied for earning £ 60m dividend
Worth an estimated £ 4 billion, Branson lives on Necker, his own Caribbean island.
He has come under fire for quickly giving 7,300 employees unpaid leave, even before the government even announced its pay subsidy package for laid-off employees.
Labor Member of Parliament Kate Osborne called the decision an “absolute disgrace” as he was urged by Labor secretary secretary Angela Rayner to sell his private island to pay for staff.
Branson then pledged £ 215 million from his personal fortune and Virgin Group’s treasury to help save the airline.
Stelios, who owns 34 percent of Easyjet along with his family, has also been bullied for earning a dividend of £ 60 million as the budget airline has entered a crisis.
Much less known are Stephen and Peter Bond, who own Loganair, which is now the UK’s largest airline after Flybe’s collapse.
The brothers are also controversial figures. They previously owned FlyBMI, which collapsed just over a year ago, leaving hundreds of passengers across Europe and most of the 376 employees out of a job.
Subsequently, some of the more lucrative routes were taken over by Scotland-based Loganair, which now warns that it could go bankrupt without the government saving.
Chancellor Rishi Sunak said last week that the government would not intervene to help airlines as a “last resort” until they have exhausted all other options. He said that decisions would be made on a case-by-case basis with individual airlines.
But Tim Alderslade, chief executive of the industry lobby group Airlines UK, said ministers need more support, including allowing airlines to offer customers vouchers for canceled flights instead of refunds.
He said, “The situation is now very serious for airlines, and we are seeing some of the practical consequences of this crisis on a daily basis, from airplanes that remain grounded to airports closing their doors.”