EasyJet boss warns airlines could go bankrupt from Covid-19 outbreak

19 March 2020, 10:11

Johan Lundgren said airlines need government help to stop going bust
Johan Lundgren said airlines need government help to stop going bust. Picture: Getty

By Matt Drake

The boss of EasyJet has warned airlines could go bankrupt amid the coronavirus outbreak without the support from the government.

In a pre-recorded interview with Robert Peston on ITV on Wednesday evening, Johan Lundgren said the airline has so far cancelled 14,000 flights this month as the virus continues to spread.

His warning came as Ryanair announced it will cancel more than four out of five flights between Thursday and March 24 with an exception for "essential connectivity" journeys.

Airline Jet2.com has suspended all of its flights until next month.

During his interview on Peston, Mr Lundgren said: "Everything from the Gulf War to the 9/11 to the Sars and the financial crisis in 2008 and ash cloud, there is nothing as bad as what I see right now. And the issue around it is really the uncertainty. You know, when is this going to end.

"If we don't get sufficient levels of support from the government and this continues for that period of time, the aviation industry will not be intact."

When asked by Mr Peston to clarify what he meant, he said: "It will not be the way we look at it today. Businesses will go bankrupt long before a year from now unless there is support in there."

Mr Lundgren suggested in addition to access to loans on commercial terms, payments on taxes could be deferred as efforts to curb the virus continue.

Meanwhile, Transport Secretary Grant Shapps held a call with major airlines an airports on Wednesday and said the government was committed to helping the sector while thanking them for helping bring home British nationals stranded abroad.

He said: "Coronavirus is having a crippling impact on the aviation industry and we cannot allow it to force world-leading, well-run, profitable firms out of business.

"We are extremely grateful to airport and airline teams who are continuing to help passengers get home safely. We stand firmly behind the sector and expect to announce a series of support measures shortly."

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Former prime minister and chancellor Gordon Brown has urged the Government to do "considerably more" in the next 48 hours to protect people's jobs amid the coronavirus outbreak.

Mr Brown, who led the Labour Party in government during the 2008 financial crash, said the scale of the crisis now facing the country is "unprecedented" as he called for international co-operation instead of "populist nationalism".

The ex-PM said Chancellor Rishi Sunak would have to do more to deal with the issues of employment protection - with many people facing the prospect of losing their jobs due to the pandemic.