Coronavirus: Government considers investing in airlines

The government is considering buying equity stakes in airlines to keep them afloat through the coronavirus crisis, according to a report in the Financial Times (paywall).

The move being considered would see the government inject billions of pounds into airlines and other companies hardest hit by the crisis in return for shares that would later be sold to private investors.

The FT report said the plan was being weighed up after warnings that the £330 billion in loan guarantees announced by the Chancellor on Tuesday may not be enough to save companies which face an almost complete halt in revenue.

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Earlier reports said City bank Rothschild had been asked to advise the government on a range of potential rescue measures following a meeting between transport secretary Grant Shapps and carriers including easyJet, British Airways owner IAG, Ryanair and Virgin Atlantic.

It is unclear which airlines could benefit from such a plan if it were to go ahead, and one source told the FT that the complexity of the issue could prevent it coming to fruition.

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