While airlines around the world are approaching governments for aid, British Airways has taken a different approach.
In the United Kingdom, Flybe went out of business early after the COVID-19 outbreak due to depressed demand. Virgin Atlantic has now approached the government looking for “clear, decisive and unwavering support” including direct aid of up to £7.5 billion and a further waiver of the Heathrow slot restrictions. A spokesperson said:
“With this support, airlines including Virgin Atlantic can weather this storm and emerge in a position to assist the nation’s economic recovery and provide the passenger and cargo connectivity that business and people across the country rely on.”
But British Airways has not asked for government aid. And, at least for now, this has not just been silence, but a deliberate choice. Willie Walsh, CEO of IAG, the Anglo-Spanish multinational airline holding company that includes Aer Lingus, British Airways, Iberia and Vueling, explained the approach:
“I think individual airlines have been approaching governments looking for state aid, we have not done so.”
“Governments would expect airlines to look at self help before they would call on governments to provide state aid.
“Clearly where governments are providing general support – particularly for employees impacted by the current crisis – we would avail of those general facilities for the benefit of our employees.
“But we have not had any dialogue with governments in relation to state aid.”
IAG did ask that the slot usage requirements be loosened at London Heathrow and that request was granted quickly.
British Airways is taking a much more realistic approach than Virgin’s demand for cash or the request for $25BN in cash across the Atlantic from U.S. carriers. I tend to think, sadly, that the situation will get worse before it gets better. Consequently, aid may still be awarded at a later time. But even now airlines should exhaust other options and declare bankruptcy before seeking state aid in the form direct cash payments.