Virgin Atlantic is on the verge of asking the UK Government for a bailout package worth hundreds of millions of pounds, according to the BBC.
Other airlines in the UK are also expected to ask for state aid, according to the report.
Virgin Atlantic, British Airways and EasyJet have been hit hard by coronavirus and capacity has all but vanished. Regional airline Flybe collapsed only recently after a government bailout failed to protect the carrier from the decimation caused by Covid-19.
UK Transport Secretary Grant Shapps said that offering state aid for airlines had not been ruled out, despite the government saying bailouts could only be used as a “last resort”.
Willie Walsh, CEO of BA’s parent group IAG, said recently that airlines should look at “self-help” before they ask for aid.
Airlines worldwide are currently facing a liquidity crisis and with most carriers holding only enough cash to last two months, there are fears that many could go bankrupt very soon without financial aid.
Virgin Atlantic previously suggested that the government provide UK airlines with around $9.3 billion in credit facilities. Sir Richard Branson has already offered to plough around $311 million into the Virgin Group to assist the airline.
European airlines have been identified as being most at risk from the Covid-19 crisis with the UK market alone expected to lose more in revenues this year than the entirety of the Middle East region.
The International Air Transport Association (IATA) has called for urgent action from European governments to offer direct financial aid to carriers. Carriers in Europe could lose as much as $76 billion in turnover this year with passenger demand projected to plummet by 46% compared to 2019.
“For airlines, it’s apocalypse now,” said Alexandre de Juniac, IATA’s director general.
He said: “We need massive action very quickly, urgently. We have a liquidity crisis coming at full speed...we desperately need some cash.
“We need governments to act fast to avoid the liquidity crisis. We are working hard to survive, we need government help. We have the people, equipment, experience, but we don’t have enough money.”
The US Government last week agreed to provide the country’s airline industry with a $58 billion aid package.