UPDATE 2-UK PM Johnson says talks continue over support for airlines

* Johnson denies abandoning sector

* Letter to airlines suggested they would have to help
themselves

* London City Airport to close until April as airlines
struggle

* Pilot union: leaks from discussions with government
"unhelpful"
(Adds closure of London City Airport)

By Alistair Smout and Kylie MacLellan

LONDON, March 25 (Reuters) - Britain is continuing talks
with the aviation industry about how best to support the sector,
Prime Minister Boris Johnson and a pilots' union said on
Wednesday, reviving the prospect of a sector-specific support
package that had seemed to be on hold.

Finance minister Rishi Sunak had told airlines in a letter
on Tuesday 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.

The letter appeared to freeze any prospect of a special
assistance package for aviation, which has been hard-hit by
curbs in travel.

But asked whether the government had abandoned the sector,
Johnson told parliament that discussions with the aviation
sector were ongoing, adding that airlines could also access loan
support schemes announced for businesses already.

"We have certainly not washed our hands of any sector of UK
business or industry. We are in regular contact with the
aviation sector, doing everything that we can to help," he told
lawmakers.

"There are ... contacts going on as we speak," he added.

UK airlines such as easyJet, IAG-owned
British Airways and Virgin Atlantic have almost no revenue
coming in after demand for air travel came to a standstill,
forcing them to ground hundreds of planes and putting thousands
of jobs and the future of the sector at risk.

London City Airport said it would suspend all commercial and
private flights from Wednesday evening until the end of April
following Britain's order that people should stay at home and
stop travelling.

"At this point in this fast-moving and unprecedented
situation, we think this is the responsible thing to do," it
said.

The British Airline Pilots Association (BALPA) said the
suggestion that the government would not provide financial
backing for airlines was misleading and that discussions about
unique measures for individual airlines were ongoing.

"It is unhelpful that correspondence is leaked out of the
context of discussions. It gives rise to the erroneous
conclusion that there is no chance of any government help for UK
airlines. I've said before that there is no 'one size fits all'
solution," BALPA General Secretary Brian Strutton said.

"The government will be looking at areas such as the
airline's financial state, whether it could raise the cash in
other ways, or if it's crucial to the UK transport system. These
deliberations still are ongoing so we should await the
outcomes."

(Editing by Kate Holton and Stephen Addison)