The UK’s Aviation and Aerospace industries will need a package of sectoral support measures to protect companies from the threat to their survival posed by the Covid-19 crisis, after tough new restrictions were imposed on travel.
We recognise the UK Government’s need to act in the face of a public health emergency. However, following the imposition by UK authorities of travel bans with limited exceptions and the suspension of all air corridors, ADS, Airlines UK, and the Airport Operators Association (AOA), have written to the Prime Minister and Chancellor to urge the Government to put an Aviation and Aerospace recovery plan in place.
The three organisations who together represent UK airlines, airports and aircraft manufacturers, have called for measures including financial support for companies affected, swift delivery of a more resilient testing system to support a resumption in international travel, and relief from levies, duties and charges.
ADS Chief Executive Paul Everitt said:
“Aviation and aerospace are among the worst affected sectors from this ongoing crisis, and any signs of recovery have been thrown into reverse by new restrictions on travel. Many companies now need specific support measures to survive and to avoid putting thousands more jobs at risk.
“In the long term, reaching our Jet Zero ambitions depend on a robust UK aerospace industry investing heavily in new technology, supported by Government.
“To achieve a strong overall economic recovery from this crisis the UK must sustain aviation and aerospace industries that connect us to global trading partners and provide vital jobs in every part of the country.”
Airport Operators Association Chief Executive Karen Dee said:
“Airports are major employers in their regions and engines of national and regional economic growth, vital to both the UK Government’s global Britain and levelling-up agendas. The near-total collapse of air traffic over the last twelve months is thus devastating for communities around airports and the UK as a whole.
“The Government’s lack of comprehensive support for aviation is effectively tying one of the UK’s hands behind its back – economic recovery will be more difficult and take longer.
“To ensure airports are in fighting condition to support the UK’s economic recovery, the Government must urgently set out the long-promised Aviation Recovery Package. Crucially, with travel bans in place for UK travellers across the globe – including now the EU, new and existing measures must be in place until there is a sustained restart of air traffic.”
Airlines UK Chief Executive Tim Alderslade said:
“With the lockdown, travel ban and now mandatory pre-departure testing, UK airlines start 2021 having taken one step forwards and two steps back. Without the ability to bring in critical revenue, there remains a limit to the amount of debt carriers can take on, having already done everything asked of them by the Chancellor and absorbed billions from private investors, banks and the Treasury.
“It’s vital that aviation receives the same kind of support as handed out to the hospitality industry, on the basis that trading has in effect been shut down; this means grants and further liquidity measures, ending the double taxation of domestic air travel though Air Passenger Duty, and an acceleration of the roll-out of rapid pre-departure testing and the vaccine.
“Ultimately, if we cannot re-open travel the future of UK aviation will be bleak indeed but we’re hopeful Government will step in and recognise its importance and contribution to UK plc, so we can continue delivering for passengers.”
This month UK flight volumes have fallen to around 80 per cent lower than comparable figures from 2019. Across Europe, air traffic numbers more than 60 per cent lower than pre-crisis levels.
There have already been 15,000 job losses in UK aerospace manufacturing linked to the impact of the pandemic on industry, while 30,000 job losses have been announced by UK airlines. The AOA estimates that total job losses across UK airports and associated businesses is likely to exceed 110,000.
The beginning of Covid vaccination programmes in the UK, Europe, and around the world provides the realistic prospect of a long-term sustainable recovery to begin this year. However, the severe immediate impact on sectors like aviation and aerospace, and the slow recovery expected in these industries, means additional support is now required.
ADS, Airlines UK and the AOA are calling for an Aviation and Aerospace Recovery Plan that provides short-term financial relief alongside a longer-term recovery framework as an urgent priority. This should include:
- Relief from business rates for aviation and aerospace companies to assist with cashflow pressures and temporary removal of industry payments for CAA and other regulatory charges.
- Measures to stimulate demand, support the viability of airlines and strengthen a recovery as restrictions are lifted. This should include a temporary suspension of Air Passenger Duty for 12 months, as and when aviation is ready to fly at scale, alongside the ending of the double APD charge for those who travel domestically in the UK. In addition, grants should be made available to airlines and further access to loans at pre-Covid rates.
- Sector-focused support for companies affected by restrictions and further loss of demand, including access to the £500m discretionary fund and long-term investment funding for the aerospace supply chain.
- Swift delivery of the recommendations from the Government’s Global Travel Taskforce, with a pathway to a more resilient, quicker and cheaper traveller testing system that eliminates or significantly reduces quarantine, working with international partners to prioritise key travel corridors and establish common testing protocols. This could include the Government subsidising testing costs for passengers.
- A commitment to enhance the UK’s Jet Zero ambitions by increasing support for Sustainable Aviation Fuels and doubling funding for the Aerospace Technology Institute to underscore the long-term investment opportunities in the UK.
