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Aviation industry facing continuing cash crisis
The aviation industry is warning of a continuing cash crisis because of the effect of Covid-19, with Airlines UK asking the Government for more help and Airbus warning its survival is at stake without immediate action.
Airlines UK has asked the Treasury to provide certainty for its members about the ongoing operation of the Coronavirus Job Retention Scheme.
Airbus, meanwhile, has told its 135,000 staff to brace for potentially deep job cuts, saying it is ‘bleeding cash at an unprecedented speed’.
Virgin Atlantic says it is still in talks with the Government over financial help, while the Unite union has outlined a ‘radical plan’ to save the aviation industry.
Airlines UK chief executive Tim Alderslade has written to Chancellor Rishi Sunak to say that, if the scheme is withdrawn prematurely, carriers ‘experiencing only a tentative revenue recovery will face a renewed cash crisis’.
"We believe that the scheme will need to be extended beyond June, and that consideration should be given to measures – including a ‘tapering’ of the scheme or a review on a sectoral basis – to avoid aviation facing a cliff-edge post-June, whilst services are scaled-up," the letter says.
It adds: "Research by IATA [the International Air Transport Association] has shown that a substantial number of travellers are likely to delay a return to travel, and a majority could wait until they have greater certainty around their own personal finances.
"There is early evidence of this trend in the Chinese and Australian markets, where domestic demand has continued to deteriorate or remain at substantially reduced levels even after the rate of new infections has fallen significantly.
"This work will also examine economic and policy measures to support the sector, and we remain clear that further such measures will undoubtedly be required to get UK aviation back on a competitive footing and to maintain its critical role in the UK economy and as the third-largest aviation market in the world."
Meanwhile, in a letter to workers, Airbus chief executive Guillaume Faury warned the company is ‘bleeding cash at an unprecedented speed’.
Airbus, which is due to deliver its first-quarter financial results this week, has already cut aircraft production by a third.
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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