China considers cash injections, mergers to bail out stricken airlines
- Proposals include allowing some state-controlled carriers to absorb smaller ones and outright cash injections
- State-owned Assets Supervision and Administration Commission which oversees state firms such as airlines, says it isn’t aware of any plan
China is considering measures such as direct cash infusions and mergers to bail out an airline industry crippled by the coronavirus outbreak, according to people familiar with the matter.
One proposal involves allowing some of the biggest state-controlled carriers to absorb smaller ones suffering the most from the collapse of travel, the people said, asking not to be identified because the information has not been discussed publicly.
Another option being explored is for the government to inject billions of dollars to bail out the industry, they said. Discussions are ongoing, and no decision has been made on what the final bailout package will look like, they said.
The press office at State-owned Assets Supervision and Administration Commission, which oversees key state enterprises such as major airlines, said it isn’t aware of any such bailout being planned. CAAC, the regulator in charge of airlines, did not immediately respond to a request for comment.
The airline industry, particularly in China, has been roiled by the epidemic after the virus was first detected in the city of Wuhan. In an unprecedented move, global carriers stopped about 80 per cent of their China flights and local airlines grounded enough planes to carry 10.4 million passengers.