Loans

UK airlines set to ask Treasury for extension to Covid loans

Operations At Heathrow Airport As U.S. Flights Reopen
Written by Publishing Team

Sunday December 12, 2021 4:59 pm

Operations at Heathrow as US flights reopen
A taxi for a British Airways passenger plane runs along the runway at London Heathrow Airport in London, UK, on ​​Monday, November 8, 2021. The United States lifts entry restrictions for more than 30 countries, allowing fully vaccinated passengers to travel from places including So Europe, China and India. Photographer: Chris Ratcliffe/Bloomberg via Getty Images

The chiefs of British Airways, Virgin Atlantic and EasyJet are set to ask the Treasury to extend Covid-19 loans and provide more economic assistance in light of new restrictions imposed by Boris Johnson last week.

The chief executives of the three airlines will meet with civil servants at the Treasury today to discuss the proposals, after airports this week warned of a surge in passenger cancellation numbers.

The loans obtained through the government’s Covid lending program are due to be made available at the end of next year, but the airline industry faces a much longer road to economic recovery after Covid than most other industries.

The Sunday Telegraph reports that British airlines will also raise the prospect of easing rates for business with permanent Chancellor of the Exchequer Charles Roxburgh, after Rishi Sunak failed to announce any new economic support in line with the new Covid restrictions.

A suite of measures has been introduced as the Omicron variant spreads across the UK, which includes forcing international arrivals to self-isolate until they have a negative PCR test.

Heathrow Airport warned that passenger numbers in November were 60 per cent below pre-pandemic levels and that there were “high cancellations” this week from business travelers concerned about new restrictions imposed around the world.

“[The] The airport said the high level of cancellations by business travelers worried about being caught overseas due to pre-departure testing shows the potential damage to the economy from travel restrictions.

British Airways, International Airlines Group (IAG), easyJet and Ryanair have all received money through the Bank of England’s Covid Corporate Fund, which has provided large amounts of cash to investment-grade companies.

IAG received around £300m from the fund in May last year, while Easyjet is believed to have received £500m.

IAG lost 2.49 billion pounds in the first nine months of this year, while EasyJet reported last month that it lost 1.13 billion pounds in the year to September 2021.

A Treasury spokesperson said: “Senior Treasury officials have regular meetings with businesses and trade associations to understand the impact of COVID on their businesses.”

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