Government bailout for airlines possible?

Graham_Devon

If it goes on many days longer, a number of European airlines will run into financial difficulties and may need bailing out by governments - or so I am told by senior airline figures.

From Robert Peston's blog on the BBC.

BA seems the best placed the weather the storm.

What would be the chances of a government bailout if this did go on for a couple of weeks....or, however long it would take for airlines to start hitting the wall financially?

Would have to be a europe wide thing, surely?

vivatifosi

Well I shudder to think as DH works for an airline.

Gordon Brown was on one of the TV channels this morning (BBC? Andrew Marr?) and said that the EU may be in a position to make funding available.I've had a look though and can't find this in any of the news stories, but honest, I'm not imagining it!

Thrugelmir

The effects of the volcanic cloud may well speed up the consolidation of the air industry.

Both Ruinair and Easyjet seem to have dropped a fair number of routes/airports from their schedules this year.

wymondham

Why does a private business such as an airline need bailing out by the Government? If it fails it's due to it being unviable and it should fail???

[Deleted User]

wymondham wrote: »

Why does a private business such as an airline need bailing out by the Government? If it fails it's due to it being unviable and it should fail???

Why does a private business such as a bank need bailing out by the Government????

wymondham

Domino9 wrote: »

Why does a private business such as a bank need bailing out by the Government????

well, much as I objected to it I could see why a bank could not fail as they underpin many things, but airlines????

mind you, they have already supported the car industry, so i suppose why not airlines?? The Government is acting like a needy mother who must have dependants!

Graham_Devon

wymondham wrote: »

Why does a private business such as an airline need bailing out by the Government? If it fails it's due to it being unviable and it should fail???

It's kind of vital to carrying on operations across Europe.

Sure, it's a private business, but should the airline industry go to the wall, we all suffer far more.

wymondham

I'm getting a bit tired of all these private businesses that prove to be so vital that they cannot fail.... either it's a private business (and lives and dies by it's success/viability), or it isnt (and is state run/owned etc..) .. at present we seem to have more services/companies coming into the grey area and be both of the above which are incompatible in my eyes..

I equate this bailing out as a parent who never lets their children appreciate the effects of their actions. If you don't learn, you keep doing it as you're encouraged not to change your ways...

Note to self:

I must create a business that becomes indespensible and cannot been seen to fail (as this could cause inconvienience). Keep all the profits in the good times. run my business how I like to benefit me, but if things go pear shaped - no worries! - get support from the government and let the tax payer take on my responsibility and losses. They will of course all want to do this anyway since they can't do without my product/service so everyone is happy...??

JP45

wymondham wrote: »

I equate this bailing out as a parent who never lets their children appreciate the effects of their actions. If you don't learn, you keep doing it as you're encouraged not to change your ways...

I can see where you're coming from but I don't think you can really equate the impact of an Icelandic volcano to the effects of their actions, as though the airlines have somehow brought this upon themselves.

mbga9pgf

wymondham wrote: »

I'm getting a bit tired of all these private businesses that prove to be so vital that they cannot fail.... either it's a private business (and lives and dies by it's success/viability), or it isnt (and is state run/owned etc..) .. at present we seem to have more services/companies coming into the grey area and be both of the above which are incompatible in my eyes..

I equate this bailing out as a parent who never lets their children appreciate the effects of their actions. If you don't learn, you keep doing it as you're encouraged not to change your ways...

Note to self:

I must create a business that becomes indespensible and cannot been seen to fail (as this could cause inconvienience). Keep all the profits in the good times. run my business how I like to benefit me, but if things go pear shaped - no worries! - get support from the government and let the tax payer take on my responsibility and losses. They will of course all want to do this anyway since they can't do without my product/service so everyone is happy...??

Thats all fine when you are constrained to your country. The airlines are not; they are a truly global industry and we can have market share whipped away from us as soon as we want to give it to the Likes of Air France, who are heavily subsidised by their government.

Problem with that then of course is OUR government misses out on the likes of corporation tax if BA or Virgin folds, not to mention DSS payments, which I think we can all agree is pretty essential right now to prevent.

wymondham

JP45 wrote: »

I can see where you're coming from but I don't think you can really equate the impact of an Icelandic volcano to the effects of their actions, as though the airlines have somehow brought this upon themselves.

Being a private business they should have disaster recovery provisions like any other business. The fact they are airlines should encompass these types of scenarios when they cannot fly for a multitude of reasons. Most businesses have reserves to cater for unexpected situations. They are private businesses and should not receive state funding if they have not made adequate provisions themselves....