Skift Take
The continuous publication by the Bank of England of a list of business with outstanding debts is a pointer of how deeply impacted the travel industry has actually been by coronavirus.
Matthew Parsons
The UK government’s list of companies that have yet to pay back their emergency situation Covid loans offers a snapshot of how badly the travel market has been impacted by the pandemic.
The UK loaned a total of $50 billion to a range of companies as part of its Covid Corporate Funding Facility, set up by the Treasury and the Bank of England.
| Business | Amount owed since Oct. 6 |
|---|---|
| Ryanair DAC | $817 million |
| easyJet PLC | $408 million |
| Stagecoach Group PLC | $408 million |
| Wizz Air | $408 million |
| Gatwick Airport Limited | $374 million |
| Jet2 Plc | $272 million |
| Flight Centre UK Limited | $156 million |
The money was made available to any firms that make a product contribution to the UK economy, and was designed to help them bridge coronavirus interruption to their cashflow, through the purchase of short-term debt in the kind of industrial paper, of up to 1 year maturity.
The plan closed at the end of March 2021, and six months later on there is $4.6 billion impressive– with travel companies headlining the list. Business have till March next year to repay their loans.
Existing debts from three airline companies alone amount to more than $1.6 billion, according to information published by the Bank of England. Ryanair owes $817 million, while easyJet and WizzAir each owe $408 million.
None of the companies are late in paying back the loans, the Bank of England validated to Skift. It was likewise unable to discuss when specific companies were needed to repay their loans.
“We plan to repay the remainder of the Covid Corporate Financing Facility loan when it is due later this year,” a representative for easyJet informed Skift.
Flight Centre UK Limited has an outstanding debt of $156 million. Up until the beginning of March this year, the debt stood at $88 million. “Since the government statements about the relaxation in travel guidelines and destinations the British public can take a trip to, Flight Centre has actually seen a doubling in turnover and is excited to see travel recuperating. Flight Centre UK Ltd is due to repay the treasury backed CCFF loan in March 2022,” Adam Murray, Flight Centre’s European chief monetary officer, told Skift.
“While our industry is still reacting to high levels of uncertainty, the healing is tracking with our internal projections and Flight Centre intends to meet its dedications under the regards to the CCFF loan in March 2022, when they fall due,” he added.
Gatwick Airport’s Covid loan stands at $374 million, while coach operator Stagecoach remains at $408 million.
In general, 107 different companies between March 2020 and March 2021 benefited from the plan.
“As one of the markets that has been hardest hit by the pandemic, it is unsurprising that travel and related service providers have dealt with considerable monetary difficulties. For lots of UK providers, it made prudent company sense to benefit from the federal government’s Covid loans,” said Scott Davies, CEO of the UK’s Institute of Travel Management.
“However, it deserves keeping in mind that corporates always carry out due diligence throughout the request for information and propositions procedure relating to a provider’s financial stability– this has always held true even prior to Covid. Our purchaser members would not for that reason single out any particular supplier in regards to bewaring about working with them. The buyer-supplier relationship is different for each corporate,” he included.