Covid 19 coronavirus: Airlines' week from hell - who will survive and who will go to the wall?

Airlines have plead for a multibillion-pound package of support from ministers amid a wave of flight groundings as people stop travelling abroad. Photo / Getty Images

Airlines' fate remains uncertain. Tens of thousands of jobs lost, services brought to a standstill and desperate pleas for state aid. Who will survive and who will go to the wall? Who long will the after effects last?

Grant Shapps was starting to get on people's nerves. On Wednesday at 9am, an emergency conference call between airline executives and the UK Transport Secretary had been convened and frustration was mounting as the industry confronted the biggest crisis in its history.

"He kept using this 'days not weeks mantra' over and over again," says one executive who appealed for a bail-out. "And if he said 'we are absolutely going to get this done' one more time, I was going to go spare!"

But it could be worse, thought some on the line. Although he was not to everyone's taste, at least it was Shapps running the show, rather than aviation minister Kelly Tolhurst.

"He was reasonably impressive," says another attendee, thinking back to an underwhelming first call with Tolhurst, the previous Thursday.

The junior minister, just weeks into her post, had left the airline industry's top brass worried. Bookings had evaporated and airlines needed cash quickly, she had been told. But Tolhurst did not seem to understand just how desperate the situation was going to get, insiders say. So with the Secretary of State in charge, here was some sign of serious intent.

Wednesday's conference call, which was followed by one with the major airport bosses, came in the middle of the industry's week from hell.

The coronavirus pandemic has brought airlines and airports to their knees. Fleets are this weekend being grounded with tens of thousands of jobs at risk.

Bailouts will be required to avoid widespread failures. Global trade body Iata estimates $200bn (£170bn) will need to pumped into the sector. Shapps' intervention on Wednesday followed a pledge by Chancellor Rishi Sunak on Tuesday teatime that the Government would "draw up a support package for airlines and airports" in the coming days.

Last weekend, not long after the call with Tolhurst, Virgin Atlantic decided to take matters into its own hands and penned a letter to the Government asking for bail-out of up to £7.5bn.

Most, but not all, airlines agreed support from taxpayers was needed.

Willie Walsh, the boss of British Airways' owner IAG had been due to retire this summer. But the plea by Virgin Atlantic, an old foe with whom he had traded blows for years, prompted him on Monday to delay his plans to step down.

As Labour MPs attacked billionaire Virgin founder Sir Richard Branson for demanding taxpayer cash, Walsh issued a withering broadside on those wishing to go cap in hand to Westminster.

Airlines should "look at self-help before [calling] on [the Government] to provide state aid," he said. The biggest rivals in the industry were at each others' throats once again. Later that afternoon, Virgin Atlantic boss Shai Weiss held a conference call with the airline's 8,500 staff. "Drastic action" was required, he said.

Within days, three quarters of the fleet would be parked up and to mitigate redundancies, staff would be asked to take eight weeks of unpaid leave over the next three months, Weiss explained.

The number of travellers in airports has dried up drastically. Photo / Getty Images

With Virgin calling for cash, airports feared they might be left high and dry. Sunak's speech on Tuesday specifically referenced airports as well as airlines – bosses of bases up and down the country breathed a collective sigh of relief.

"If no planes land and take off, then we get no revenue," says one airport insider. "Airlines have got movable assets. Airports don't move."

While on the one hand the talks with Shapps gave rise for further hope, they further laid bare the rift between British Airways and Virgin Atlantic. Walsh, appearing to relish the scrap, stuck to his guns, sources say. Senior insiders at Virgin Atlantic were not happy. The Irish veteran was using the crisis to push it over the edge, they claimed.

And with £9bn in the company's coffers, IAG was better placed to ride out turbulence and pick up sought-after transatlantic routes run by its fierce rival in the aftermath.

Bilateral talks continued through the rest of Wednesday, in Thursday and on to Friday with officials trying to gather as much information as possible. The Department for Transport and regulator the Civil Aviation Authority had by this point assembled a specialist team to consider which airlines needed what.

Meanwhile, investment bankers from Rothschild were to pick apart airlines' finances and decide which ones were most deserving of a handout.

Airlines and airports were buoyed by a state bail-out of Norwegian, Gatwick airport's third-biggest customer. A rescue package for Lufthansa also seems to be on the cards.

The announcement by the Government to pay 80pc of wages has a big step in the right direction, larger airlines say. It has removed the immediate danger for many.

Many in the sector thought the industry was at the front of the queue on Tuesday. They now fear that others, such as pubs, cinemas, hotels and restaurants, have their noses ahead of them.

But in terms of a longer-term solution, all the industry can do is wait, and hope, that ministers "absolutely get this done".