China Mulls Billion Dollar Airline Bailouts
Following the historic seizures of three banks in 2019, the coronavirus outbreak extends the unfortunate streak in China, this time into the airline industry.
Global carriers halted 80 percent of China flights and local airlines grounded planes with capacity totaling 10.4 million passengers in the midst of an outbreak that has infected nearly 77,000 victims. This has naturally led to pressure on Chinese airliners which some of which could be rescued by the state.
According to unnamed sources in an «SCMP» report, authorities are exploring the option of injecting billions of dollars to bail out the industry. Acquisition of smaller players via large state-controlled carriers is also being considered as another option. Additional buffers being discussed include loan repayment waivers and better aircraft leasing terms. To conclusions have been made on the final bailout packages.
The deadly outbreak has been costly to an already slowing Chinese economy – last year it recorded a 30-year low growth –and authorities are extending measures to provide buffers across the board. Just last week, the Civil Aviation Administration of China also mentioned state support, including through mergers, without providing details. Meanwhile, existing public measures included plans for lower airline taxes and fees; protection employment; and a temporary waiver of social security premiums for all firms in the sector.
