UPDATE 1-UK tells airlines to try raising own capital before state will help -source

(Adds detail, background, airline responses)

LONDON, March 24 (Reuters) - Britain has told airlines that
state investment to help them survive the coronavirus crisis
will only be considered once they have looked at the possibility
of raising capital from existing investors, a person familiar
with the situation said.

UK finance minister Rishi Sunak has written to airlines and
airports to set out how they could benefit from a government
help package for businesses set out last week, the person
familiar with the situation said.

"The government expects the sector to look at raising
capital from existing investors," the person added.

UK-based airlines easyJet and Virgin Atlantic asked
for government support earlier in March to help them survive a
period when air travel has come to a standstill.

But IAG, the parent company of British Airways, has
not asked for any help and has long been a vocal opponent of
state support for airlines.

easyJet has come under fire for asking for government
support in the same week as it paid out 174 million pounds to
shareholders in dividends.

The airline has said it was legally obliged to make the
payment which was decided before coronavirus meant customer
demand for travel dried up and it had to ground the majority of
its fleet.

IAG declined to comment on the letter on Tuesday, while
easyJet said it was reviewing the letter alongside the measures
announced last week.

"Our immediate focus is on liquidity and protecting jobs and
we are working with the government to make best use of these
measures," a spokeswoman for easyJet said by email.

(Writing by William Schomberg, additional reporting by Sarah
Young, editing by Estelle Shirbon)