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Airlines ask for British government help to survive crisis

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Airlines ask for British government help to survive crisis

FILE PHOTO: BA plane taxis past tail fins of parked aircraft to runway near Terminal 5 at Heathrow Airport

LONDON (Reuters) - Airlines called on the British government to help ensure their survival during the coronavirus crisis on Sunday after the U.S. extended restrictions on European travellers to include Britain.

British Airways, part of International Consolidated Airlines Group <ICAG.L>, had warned on Friday of the threat posed by the coronavirus which has grounded flights worldwide.

Things worsened over the weekend as holiday destinations such as Spain declared a state of emergency and the Trump administration added Britain and Ireland to its list of countries facing travel curbs.

"The time for action is now," said Airlines UK, a trade body for airlines with UK-registered operations, whose members include British Airways, Virgin Atlantic, Norwegian and Ryanair.

"We're talking about the future of UK aviation - one of our world-class industries - and unless government pulls itself together who knows what will be left of it once we get out of this mess," it added.

The chairman of Virgin Group, the majority shareholder in airline Virgin Atlantic, is expected to ask the government for as much as 7.5 billion pounds to prop up the industry, Sky News reported.

The government has been meeting airline industry leaders and further discussions are expected this week.

"We recognise how difficult the current situation is for the aviation sector and, across government, we are engaging with the sector’s leadership to support workers, businesses and passengers," a government spokesman said.


CALLS FOR HELP

Coronavirus has slashed demand, prompting airlines to cancel flights and cut costs and ask governments and regulators for help as they battle to get to grips with what they hope will be short-term, rather than long-term, disruption.

In the United States, Delta Air Lines <DAL.N>, American Airlines <AAL.O> and United Airlines <UAL.O>, the three largest U.S. carriers, said on Friday there were in talks with the U.S. government about potential assistance.

German airline group Lufthansa <LHAG.DE> said on Friday it would ask several European governments for liquidity help to counter the effects of the coronavirus crisis.

The appeal for assistance from some of the world's largest carriers highlights the dramatic upheaval in the airline industry amid the spread of the virus, with the head of British Airways calling it the industry's worst crisis, surpassing 9/11.

U.S. carriers have traditionally accused foreign rivals, particularly in the Gulf, of benefiting from state support, while some foreign rivals say big U.S. airlines have benefited from takeover protections and Chapter 11 bankruptcy laws.

But IAG Chief Executive Willie Walsh told a conference in early March that struggling airlines should not be given state aid to enable them to survive the drop in demand.



(Reporting by Keith Weir, Tim Hepher and Paul Sandle; Editing by Alexander Smith)