Transport for London sees government bailout as lockdown hits revenue

Daily passenger numbers on London's transport network have dropped by 95% during lockdown

Trains arrive and depart from Victoria Station near Battersea Power Station on April 27, 2020 in London. TfL is seeking a state bailout as its cash reserves have run dry during the coronavirus lockdowShow more

The operator of the London Underground is in talks on a £2 billion (Dh11.4bn) state bailout as coronavirus restrictions curtail travel in the UK capital, the Sunday Times reported.

Transport for London, which also oversees bus services, may have to delay or scrap major expansion plans in return for the funding, the newspaper said. London mayor Sadiq Khan, who oversees TfL, has already abandoned a fares freeze. Ticket sales generate about 85 per cent of TfL’s income.

The agency could run out of funds within two months as it is down to its last £1bn, the report said. Daily passengers numbers on the metro system have plunged 95 per cent due to a nationwide lockdown designed to contain the spread of the coronavirus.

Talks on government support are underway and a successful conclusion “is now urgent”, TfL said in reply to questions from Bloomberg. The transport operator is facing a “substantial reduction in income over a period of months”, it said. It didn’t comment on the size of any potential bailout.

The agency has £3.3bn of bonds outstanding, according to data compiled by Bloomberg. A £400 million 2025 note fell to as low as 101p on the pound during a March credit rout but has since bounced back to about 106p.

TfL held an investor roadshow for an expected £300m green bond in February. The 20-year deal is yet to appear in the primary bond market.