EasyJet boss fears rival airlines will use state aid to ‘grab market share’

The boss of easyJet has warned rival airlines could use state aid worth billions of euros to “grab market share”.

Chief executive Johan Lundgren called on the Government to boost support for UK aviation companies, which he said are in a “fight for survival” due to the coronavirus pandemic.

Financial pressures from the pandemic are “way beyond what you can expect the industry to deal with”, the boss of the UK’s largest airline said.

EasyJet secured a £600 million loan from the Bank of England’s emergency coronavirus fund in April, but Mr Lundgren said in terms of overall support for UK aviation “I don’t think there has been enough”.

European airline firms such as Lufthansa, Air France-KLM and Norwegian are among those to receive major financial backing from their home countries during the pandemic.

In an interview with the PA news agency at the opening of Berlin Brandenburg Willy Brandt Airport, Mr Lundgren said: “Billions and billions of euros have been poured into a number of our competitors.

“I’m not against state aid, because I do think (the pandemic) has gone over and above what you can be expected to deal with.

“But what I am concerned about is that (the money) is being distributed so unevenly, and also, what is the certainty that some of this money will be repaid?

“Will this be used by airlines to try and grab market share? Will it be used in a way that is actually anti-competitive?

“That’s not good at all, for anyone.”

EasyJet expects to cancel most flights due to take off or land in the UK after the new lockdown in England begins on Thursday.

When recovery comes I think it's going to be a strong recovery lasting for some time because people are fed up

The Luton-based carrier has warned it will record the first annual loss in its 25-year history after seeing passenger numbers halve during the virus crisis.

It is set to slump to an underlying loss of more than £800 million for the year to September 30.

Mr Lundgren said he is “as frustrated as anyone” about the “ever-changing rules” relating to the UK’s quarantine policy, and described progress towards testing travellers as slow.

He revealed easyJet enjoyed a surge in demand for flights to the Canary Islands after they were added to the quarantine exemption list last month, with sales “through the roof”.

This shows the drop in overall passenger numbers is due to restrictions implemented by governments rather than people not wanting to fly, Mr Lundgren claimed.

“When recovery comes I think it’s going to be a strong recovery lasting for some time because people are fed up.

“There will be many difficult decisions that we need to make going forward that impact everything.

“But I’m determined to manage this through and then come out of this in a stronger fashion.”

EasyJet warned in May it planned to cut up to a third of jobs, but it has since been able to secure agreements with unions to limit compulsory redundancies.

Asked if further job losses are likely, Mr Lundgren replied: “That is something that we need to continue to monitor.

“There’s no certainty.”