Will the airlines get a bailout?

Will the airlines get a bailout?

The global effort to contain the spread of the Coronavirus has impacted the travel industry in an unprecedented way. Airlines are cutting flights, tourists are cancelling trips and staff are unable to travel for work, due to travel restrictions and the constantly evolving emergency legislation around the world.

Unless governments intervene and offer their support, just as the International Air Transport Association warned on Friday, serious consequences could be on the horizon. The UK government did not step in to assist regional UK carrier Flybe and its demise will cause considerable pain post Coronavirus for UK business commuters.

In our view, in spite of the Flybe precedent, when it comes to national flag carriers and larger providers such as EasyJet and Ryanair, some, if not all, will be saved by government intervention, because if they all collapse, there is no chance of a quick recovery for international business, and the UK, in particular is an international trading nation. Post the crisis and a bailout we see various M&A opportunities.

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