Sky News reported that Peter Norris, the chairman of Virgin Atlantic Airways' majority shareholder, Virgin Group, will write to the UK prime minister today Monday to say the country’s airline sector needs a massive cash injection.
Virgin’s request comes as all the UK’s major airlines British Airways, Virgin Atlantic, easyJet and Irish carrier Ryanair are expected to announce mass groundings of aircraft and potentially huge redundancies as the COVID-19 crisis escalates.
IAG’s chief executive Willie Walsh is to delay his retirement to deal with Covid19, while his designated successor Luis Gallego will continue in his role as Iberia chief executive for the next few months to lead the response in Spain.
In a statement IAG said that government travel restrictions were having a significant and negative impact on the demand for global air traffic on almost all routes operated by IAG’s airlines.
So far IAG has suspended flights to China, reduced capacity on Asian routes, cancelled all flights to, from and within Italy and made various changes to its network.
IAG said that for April and May, it plans to reduce capacity by at least 75 per cent compared to the same period in 2019.
IAG stressed that has strong liquidity with cash, cash equivalents and interest-bearing deposits of €7.35 billion as at 12 March. In addition, undrawn general and committed aircraft backed financing facilities amount to €1.9 billion, resulting in total liquidity of €9.3 billion.
While EasyJet has announced it will make large, but as yet unspecified reductions to its flight schedule and also emphasised is strong financial position by saying it had 1.6 billion pounds of cash plus an undrawn $500 million revolving credit facility.