April 27, 2020 / 8:02 AM / a month ago

UK airlines want coronavirus wage support scheme extended beyond June

LONDON (Reuters) - Britain’s airlines want the government’s coronavirus wage support scheme to be extended beyond June, maintaining the assistance for longer with a only slow recovery in air travel expected.

FILE PHOTO: Tail Fins of British Airways planes are seen parked at Heathrow airport as the spread of the coronavirus disease (COVID-19) continues, London, Britain, March 31, 2020. REUTERS/Toby Melville/File Photo

Airlines UK, the industry’s representative body, wrote to the finance minister requesting an extension of the scheme, which airlines including British Airways (ICAG.L) and easyJet (EZJ.L) have used to furlough workers.

Under the Coronavirus Job Retention Scheme, the government pays 80% of the wages of staff who are temporarily laid off, up to 2,500 pounds a month.

Airlines, many of which have grounded the majority of their fleets, have used the scheme to avoid making staff redundant in the hope that when travel restrictions are eased and demand returns, they can restart operations.

The scheme runs until the end of June, but the airlines want it to be extended “to avoid aviation facing a cliff-edge post-June, whilst services are scaled-up”, Airlines UK said in its letter.

Global industry body IATA has predicted a slow recovery in air travel and warned that many airlines could go out of business, with European traffic currently down by 90%.

UK-based airline Virgin Atlantic continues to talk to the British government about a bailout package to help it survive.

Air travel faces a further headache as the government said it was considering the possibility of requiring passengers to go into quarantine for two weeks once they arrive in the UK.

Asked about the extension of the job retention scheme for airlines, junior health minister Edward Argar told Sky News on Monday that he knew the finance minister Rishi Sunak was keeping the schemes under review.

“I know that the Chancellor is very, very aware of how important the airline industry is,” he said.

Reporting by Sarah Young; Editing by Kirsten Donovan

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