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* EasyJet, Virgin Atlantic ask for government help
* UK says in discussions on helping industry
* EasyJet could ground majority of fleet
* IAG to cut 75% of capacity
* Shares slump
(Adds PM spokesman, Virgin Atlantic details)
By Sarah Young
LONDON, March 16 (Reuters) - Britain's big airlines said on
Monday they would have to ground most of their fleets to survive
the coronavirus crisis, with easyJet and Virgin - though not
British Airways - appealing for government bailouts to save the
industry from collapse.
BA's parent company IAG said it would cut its flying
capacity by at least 75% in April and May. EasyJet said
it could ground the majority of its fleet on a rolling basis.
Virgin Atlantic said it would park up to 85% of its fleet
during April and was asking staff to take up to eight weeks
unpaid leave over the next three months to avert job losses.
Shares in British Airways owner IAG plunged 27%, while
easyJet tumbled 18%. IAG's boss, Willie Walsh, announced he was
putting off plans to retire. Virgin Atlantic, owned by Richard
Branson and U.S. airline Delta, is not listed.
Britain said it was engaging with aviation leaders over
support for the industry.
"HMRC (the UK's treasury) is ready to help all businesses,
including airlines, experiencing temporary financial
difficulties due to coronavirus," a spokesman for Prime Minister
Boris Johnson said on Monday.
EasyJet called for access to finance to help with liquidity
crunches, the suspension of passenger taxes and air traffic
charges, and longer relaxation of airport slot rules.
"European aviation faces a precarious future and it is clear
that coordinated government backing will be required to ensure
the industry survives," easyJet's CEO, Johan Lundgren, said in a
statement.
Virgin Atlantic asked for the government to provide up to
7.5 billion pounds in emergency credit facilities, which it said
would stop credit card processors from withholding customer
payments.
IAG, which owns Spain's Iberia and Vueling and
Ireland's Aer Lingus as well as BA, said it had not asked for
state aid. Its boss, Walsh, has long opposed government support
for airlines.
"I think individual airlines have been approaching
governments looking for state aid. We have not done so," he
said, adding that the group would however accept any general
facilities provided to all companies which would benefit
employees.
GROUNDED
Both easyJet and IAG said they had a strong balance sheet
and Citibank research showed that easyJet and IAG would still
have much lower net debt to EBITDA ratios than European rivals
Air France-KLM and Lufthansa after a
simulated three-month shutdown.
IAG said it had total liquidity of 9.3 billion euros, while
easyJet said it had 1.6 billion pounds of cash plus an undrawn
$500 million revolving credit facility.
Both airlines said they could not provide profit guidance
for their current financial years. IAG also detailed cost cuts
including a freeze on discretionary spending, working hours
reductions and a temporary suspension of employment contracts.
Walsh told investors that 2021 capacity was likely to be
lower than currently planned, and that the crisis would
accelerate the permanent retirement of dozens of aircraft
including BA's 747s and Iberia's A340s.
(Reporting by Sarah Young, additional reporting by Elizabeth
Piper, editing by James Davey, Kate Holton; Editing by Peter
Graff)
