Governments should have let airlines fail during pandemic: UK IEA study

Analysts from the UK’s Institute of Economic Affairs think-tank have argued that governments could have helped contain the pandemic by allowing a “natural collapse” of the airline industry, rather than permitting huge bail-outs. The institute has published a study – entitled The Future of Transport After Covid-19 – which looks at the impact of the pandemic, and changes to consumer behaviour, on various transport modes, including aviation. It highlights the relaxation of European Union state-aid rules, which enabled large rescue packages to be dealt to airlines, but says this amounted to a “contradiction at the heart of government policies”, given the role of air transport in conveying the contagion. “Vast amounts of taxpayers’ money have been spent bailing out aviation when this sector was central to the spread of the virus,” says the study. “Effectively, governments have been subsidising the pandemic.”<br/>