It’s not just the $78 billion and more set aside for U.S> aviation in the CARES Act. Airlines around the world are looking to governments to prioritize them, even over public health expenditures, during the current pandemic.
Thai Airways wants a US$2.2 billion bailout they needed tons of government cash even before COVID.
Meanwhile German flag carrier Lufthansa expects to receive $11 billion in government funds, against a current market cap of $4 billion. Perhaps this will give the airline enough money so that they don’t have to steal funds from customers whose flights are cancelled?
The equity injection from the ESF — possibly up to $4 billion — could initially come as a non-voting form of capital dubbed “silent participation”, two of the sources said, adding that some or all could be converted into shares at a later stage.
Roughly $5 billion in loans, 80 percent guaranteed by German state bank KfW, could be part of the package, they said, adding that Austria, Switzerland and Belgium could contribute a combined $1 billion to $1.5 billion.
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Air France KLM is getting a similarly-sized bailout package from France and the Netherlands.
Norwegian which has already declared four of its subsidiaries bankrupt even after legislation passed making some subsidies available, have loosened bankruptcy rules in ways that could help the airline restructure – requiring less consensus of debt and equity holders on a plan to move forward.
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While there’s no doubt that airlines are struggling in the face of a sudden evaporation of demand for their product, what’s especially striking about this moment is the success airlines are having at the political game given that public health concerns might take budgetary priority – such as prioritizing funds for hospital beds, protective equipment, ventilators (which don’t appear to do much good) but just as importantly for treatments and ultimately vaccine research.