European airline bailouts hit E26.6b: HSBC

European governments have provided the continent’s airlines with nearly E26.6b in assistance throughout the coronavirus crisis, underlining the value regulators place on the connectivity carriers provide, according to a report from HSBC. The figure is equivalent to 46% of the airline’s market capitalisation at December 2019 or 21% of the companies’ pre-Covid-19 full-year revenues for 2019, not including funds carriers accessed through furlough job retention schemes. State assistance was made available despite airlines often being held in low regard in many countries prior to the crisis, and reflects the value that governments place on carriers’ role in enabling trade and exports, including for healthcare products and PPE, as well as being enablers for tourism and providing employment. “We think that many governments came to value the connectivity offered by airlines, once their continuing existence was called into question,” writes HSBC. The bank believes the emphasis among regulators is shifting away from ensuring competitive aviation markets towards stability. For example, while state aid has been made available to many countries’ largest airline groups, it was not forthcoming to Virgin Atlantic Airways or Virgin Australia. France has also refused assistance for secondary airlines. “We think governments were judging that global connectivity is something that is valued and needs defending but that providing funds to secure a competitive aviation market post pandemic is not a priority for government resources,” HSBC says.<br/>