U.K. Labour Party Seeks Government Stakes in Hard-Hit Aviation

(Bloomberg) — The U.K.’s opposition Labour party is seeking greater government support for key sectors like aviation that have been hard hit by the coronavirus crisis, including taking equity stakes. © Bloomberg A passenger aircraft, operated by British Airways, a unit of International Consolidated Airlines Group SA (IAG), stands on […]

(Bloomberg) — The U.K.’s opposition Labour party is seeking greater government support for key sectors like aviation that have been hard hit by the coronavirus crisis, including taking equity stakes.



a plane sitting on top of a runway: A passenger aircraft, operated by British Airways, a unit of International Consolidated Airlines Group SA (IAG), stands on the tarmac at London Southend Airport, part of the Stobart Group Ltd., in Southend-on-Sea, U.K., on Tuesday, July 7, 2020. EasyJet Plc plans to shutdown bases in Stansted, Southend and Newcastle in the U.K.


© Bloomberg
A passenger aircraft, operated by British Airways, a unit of International Consolidated Airlines Group SA (IAG), stands on the tarmac at London Southend Airport, part of the Stobart Group Ltd., in Southend-on-Sea, U.K., on Tuesday, July 7, 2020. EasyJet Plc plans to shutdown bases in Stansted, Southend and Newcastle in the U.K.

A permanent reduction in demand may make it difficult for the aviation industry to meet climate-change targets, Shadow Finance Minister Anneliese Dodds said in an interview on Bloomberg TV.

Loading...

Load Error

“We need government to be much more actively involved in that sector,” Dodds said. “There will be cases where an equity stake would be the appropriate way forward, one which delivers value for money.”

The comments come as Chancellor of the Exchequer Rishi Sunak prepares to set out plans on Thursday to protect jobs from the economic fallout of the virus. Prime Minister Boris Johnson has imposed new restrictions on the British public to bring the resurgent virus under control, leading to calls for more state support for business.

Read more:

U.K.’s Sunak Cancels Fall Budget as Coronavirus Worsens

Virus Forces Sunak to Spend More on Saving U.K. Jobs, Firms

Sunak Weighs German-Style Program to Replace U.K. Furlough

The slump brought on by the pandemic has reversed decades of growth in the aviation industry, sending airlines and aerospace firms into crisis — one that has deepened in recent weeks with the rising infection rates. On Thursday, the International Air Transport Association said that airlines may require a fresh round of state support if traffic levels continue to languish.

Sector Aid

Unlike their counterparts in the European Union, U.K. airlines haven’t received sector-specific government support. To date, assistance has been restricted to state-backed loans that were available to all companies that were rated investment grade or higher.

British Airways, owned by IAG SA, has come under fire for its initial plan to cut as many as 12,000 workers, although the carrier has since revised the plan to 10,000 jobs. Richard Branson’s Virgin Atlantic Airways Ltd. was forced to pull together a court-supervised private bailout after restrictions wiped out the trans-Atlantic trade in which it specializes.

Rolls-Royce Holdings Plc, the iconic aircraft engine maker and defense manufacturer, said in the past week it plans to raise at least 2.5 billion pounds ($3.2 billion) to steady its balance sheet for the downturn. Its shares are at 17-year lows.

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.

Continue Reading
Next Post

Global Cloud Accounting Technology Market Investment Feasibility 2029 With Top Manufactures - Microsoft, Infor, Epicor

The MarketWatch News Department was not involved in the creation of this content. Sep 24, 2020 (WiredRelease via Comtex) — Radical Growth of Global Cloud Accounting Technology Market Provides an updated and current analysis of the industry’s new promotions, critical trends, current market guides, challenges, and standardization. The Cloud Accounting […]