As British Airways and Virgin Atlantic grind to a near stop the British Government has reportedly said that any bailout may be secured against a sizeable share holding in the airlines.
The concept is one being discussed in the US as well. The principle is not without precedent as both governments did the same to banks and the auto industry back in 2008, effectively part or fully nationalising them. When the shares are eventually sold the government stands to get its money back and even make a small profit for its trouble.
The amount of money being “created” is simply unprecedented in the history of the global economy. Even during war time nobody has experimented with this type of massive government intervention, but never before has a recession of this scale emerged at such speed.
Airlines and economists in general are preying that its artificially induced nature may result in a rapid return to normality. By preventing mass lay-offs and paying 80% of people’s salaries the U.K. government is ensuring a massive collapse doesn’t occur, and things can pick up fast once the emergency period abates.
The fact is the airlines will do anything to survive and just as much to get back out from under government ownership afterwards.
However there is pressure from consumer lobby groups that this is an ideal time to press the airlines to change their onerous policies on ticket conditions. The non refundable, the penalty change costs for names, compensation issues and so on.
Environmental activists also see an opportunity to press airlines in to more serious action to remedy their offset programmes which are often a joke, and stop the greenwashing they engage in relentlessly while actually doing nothing.