European Governments Weigh If It’s Time to Let Some Airlines Disappear
Photo Credit: Air France-KLM will need a hefty bailout to get through the Coronavirus pandemic. It is expected to get the help it needs. Air France-KLM
Skift Take
If the goal is efficient transportation in Europe, politicians may consider only bailing out the five biggest EU airline groups. But many other airlines are expected to receive significant government funds, partly for reasons of national pride.
Many European airlines spent much of the past two decades asking governments to leave the airline industry. Now, many are begging for help, and most will get it, even if all may not deserve saving.
It is different than in the United States. The U.S. government is bailing out airlines because the country needs a robust transportation network, but if one carrier doesn’t make it, life will go on. Other airlines, perhaps even new ones, will fill gaps.
In Europe, bailout discussion is more fraught. In this crisis, governments are not always thinking about how much capacity markets need, but instead about national pride. Regardless of market conditions, lawmakers may not want to see national airlines go bust, for reasons of politics, nostalgia, and even national security.
In the coming weeks, politicians will leverage state aid rules that allow them to help national carriers in a crisis. Some airlines will get loans, while others may get the ultimate saving — re-nationalization.
