Aviation and Aerospace Call For Recovery Plan Following New Travel Ban

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Notes to Editors

  1. Daily air traffic variation data is published by Eurocontrol here.
  2. ADS is the UK trade organisation representing the Aerospace, Defence, Security and Space sectors, with more than 1,100 member businesses.
  3. Airlines UK is the trade body for UK registered airlines, with members representing all sectors of the industry.
  4. The Airport Operators Association is the national voice of UK airports. Its members include over 50 airports and more than 150 Associate Members, made up of companies representing a wide range of suppliers in the aviation industry.

 

UK airlines respond to Government announcement on the removal of remaining travel corridors

“Travel corridors were a lifeline for the industry last summer and the Government were right to bring them in when they did. But things change and there’s no doubting this is a serious health emergency and Ministers need to act to keep borders safe and the public protected. We therefore support this latest measure, on the assumption that we will work with Government – when the time is right – to remove these restrictions when it is safe to do so and start to open up our sector again, to support the UK’s economic recovery.”  

UK airlines respond to Government announcement on pre-departure testing for arrivals beginning this Friday

Responding to the announcement by the Government that air passengers, from 4am on Friday, will be required to take a Covid test before travelling back to the UK, Tim Alderslade, Chief Executive of Airlines UK, the industry association representing UK-registered carriers, said:

“This is a national health emergency and Ministers need to act to keep the country safe. It is true that much of the sector has been lobbying for pre-departure testing – but this was always predicated on the Government removing or reducing the quarantine period at the same time. Now we have both quarantine and pre-departure testing. That’s why this new policy needs to be a time-limited, emergency measure only, in place not a second longer than necessary, and with a proper review mechanism once lockdown comes to an end. We cannot afford for this to be baked in over the whole Summer.

 

“The focus must be on returning travel to normal as quickly as possible and removing the need to quarantine or take a test as the UK population is vaccinated. Ideally, as the vaccination roll-out gathers pace and the most at-risk parts of the country are inoculated, we can start to see the economy, and travel, open up, which would enable the sector to have what will be a critical summer season for aviation.”

 

UK airlines respond to Government announcement on pre-departure testing for arrivals

Responding to the announcement by the Government that air passengers will be required to take a Covid test before travelling back to the UK, Tim Alderslade, Chief Executive of Airlines UK, the industry association representing UK-registered carriers, said:

“We recognise the UK Government’s need to act now and support the introduction of pre-departure testing in order to keep the country safe and borders open. However, this should be a short-term, emergency measure only and once the roll-out of the vaccine accelerates, the focus must be on returning travel to normal as quickly as possible in order to support the UK’s economic recovery. This includes removing the need to quarantine or test as the UK population is vaccinated and the virus is brought under control at home and abroad. Ultimately, cheaper and quicker testing is required to ensure travel can be accessible while testing is required but then needs to be unwound once vaccinations and the overall threat of Covid recedes.” 

UK airlines statement on EU Commission recommendation on restoration of essential travel between UK and EU

Responding to the recommendation from the European Commission that essential travel between the UK and EU should resume, Tim Alderslade, Chief Executive of Airlines UK, the industry association representing UK-registered carriers, said:

“We note the Commission’s guidance but clearly this now needs to be enacted by EU member states, who have so far put in place their own rules. It remains to be seen what action they will take but our position remains that testing rather than flight bans is the only way to facilitate travel and get the economy and aviation moving again.”

UK airlines welcome aviation testing regime announcement

Responding to the announcement by the Government that an aviation testing regime will be introduced from 15 December, Tim Alderslade, Chief Executive of Airlines UK, the industry association representing UK-registered carriers, said:

“This is a hugely welcome step that will begin the process of opening up international travel and restarting UK aviation. It is a good start and by more than halving the quarantine period we should see demand tentatively return and more routes and destinations become viable once again.

That said, a test at day 5 does not get rid of quarantine and that’s why we look forward to working with Government to move towards a pre-departure or domestic testing regime that can remove safely the need for self-isolation altogether, as quickly as possible. This is the only way we’re going to comprehensively reopen the market. But, with this announcement there is now light at the end of the tunnel not just for carriers and UK aviation but consumers looking to get away at Christmas and beyond.”  

UK airlines respond to furlough scheme extension

Responding to the announcement today by the Chancellor that the furlough scheme will be extended to the end of March, Tim Alderslade, Chief Executive of Airlines UK, the industry association representing UK-registered carriers, said:

“This is a welcome announcement and all the more important with aviation now essentially closed following the new lockdown travel restrictions. Furlough extension will enable carriers to retain more of the key staff and highly skilled roles that will be essential for when demand returns, but which otherwise would be at real risk.

“However, wage support covers only a portion of the high cost base airlines must cover simply to exist, and carriers face this new lockdown in a far weaker position than when the crisis started in March. Airlines – which have spent the past few months desperately cutting costs and taking on billions of pounds of collective additional debt – urgently need access to further liquidity measures to shore up their balance sheets, and the immediate introduction of a UK testing regime instead of blanket quarantine, to provide much needed certainty for customers so they can travel again with confidence.”

Why aviation matters blog series – The importance of air cargo by Zoe McLernon, Policy Manager at Logistics UK

Air freight is vital to the UK economy, contributing £7.2billion each year and supporting more than 151,000 jobs. The sector is extremely complex with both imports and exports that must be delivered safely, timely and economically. In this article, Zoe McLernon, Logistics UK’s Multimodal Policy Manager, explores the UK’s air freight industry and assesses its importance within the UK economy.

As well as its direct contribution, UK air freight holds importance across all sectors of the nation’s economy: £87.3 billion of UK Gross Value Added (GVA) is dependent on air freight exports annually, including £13.9 billion worth of pharmaceuticals. Salmon has become one of the UK’s most valuable food exports; in 2017, Scottish salmon exports were worth £600 million, growing year on year. And, while 91% of UK salmon is shipped internationally from Heathrow, increased connectivity at Scottish airports has provided exporters with alternative options, with salmon first exported on a direct flight from Edinburgh to Beijing in 2018.

Since the end of January 2020, hundreds of thousands of passenger flights have been cancelled in response to government travel restrictions across the globe to prevent the spread of COVID-19. With this, cargo capacity tailed off when it was needed desperately to transport vital medicines and medical equipment, such as PPE. In its place, fleets of freighter aircraft were mobilised to make up this capacity shortfall, and, thanks to the opportunities afforded by these aircraft, air cargo movements have now soared across the UK, with some airports reporting a 400% increase in cargo movements.

In my view, the COVID-19 outbreak is shining a light on the value of the logistics sector, particularly for those who rarely give our work a second thought, and provoking a re-evaluation of how much our economy relies on air cargo to keep our country moving. This can only be a positive thing for the future stability of our sector, at a time when many businesses are having to change the way they operate to move products and parts. That being said, aviation will take longer to recover than other modes and we must keep this at the forefront of our minds.

On the subject of Brexit, it is inevitable that the UK’s exit from the EU will affect the sector through changes to customs arrangements and air service agreements (ASAs). The UK currently has ASAs with the EU and other countries around the globe; differing depending on the country, the agreements recognise each other’s certification and approval processes. This is valid from the pilots that fly the planes, to the engineers and mechanics that work on the planes, right down to the fuel that keeps the planes flying. This agreement is still in place while we are in the Brexit transition period, however negotiations are still ongoing. It is vital that an ASA or comprehensive bilateral agreements are in place by 1 January 2021.

The continued growth of UK air freight is crucial to the overall UK economy and recovery for the sector is key, while considering the impact of EU Exit. Increasing international connectivity is a vital part of this; with more airports able to provide international freight flights, it will release much needed capacity at the current major freight airports. Moving forward, Logistics UK is calling on government to recognise air freight’s ongoing role in assisting with the response to the global pandemic, and ensure considerations are made for air cargo within aviation recovery plans.

Logistics UK (formerly FTA) is one of the UK’s leading business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With COVID-19, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods. For more information about the organisation and its work, including its ground-breaking research into the impacts of COVID-19 on the whole supply chain, please visit logistics.org.uk

Why aviation matters blog series – The CBI’s Director of Infrastructure and Energy Tom Thackray on how aviation connects British business with the world

The aviation sector is vital to the wider UK economy and its recovery from the Coronavirus pandemic. As well as employing hundreds of thousands of staff, driving investment in cutting-edge technology, and underpinning vast domestic supply chains, UK aviation matters because it connects Britain with the world and links British products, experiences and expertise with billions of potential buyers overseas.

Businesses need flights to compete in a rapidly changing world economy. From professional services firms with clients in New York, to regional manufacturers who export to the UAE, British firms have built their business models on the assumption of easy access to growing markets. And while digital connectivity has enabled many parts of the economy to keep trading in the face of the pandemic, some things still need a human touch.

Nowhere is this more obvious than in the UK’s city centres, where luxury British brands have grown to cater for the spending habits of wealthy visitors from across Asia, North America, Europe, and the Middle East.  Before Coronavirus, the ease with which operators could connect global consumers with high quality British products and services meant that by 2017, 49% of the total value of UK exports outside of the EU travelled by air.[1] Until the pandemic hit, Heathrow was the country’s largest port by value of goods transited.[2]

Growing markets reached by aircraft will also be key to delivering new trading relationships with the world after Brexit. Like no other sector, aviation’s success stands behind aspirations for a Global Britain with brand power in markets with growing middle classes such as India, China, and Brazil. Increasing the UK’s share of exports to these markets will rely on air routes from regional centres as well as the London hubs. For instance, pre-pandemic, the Manchester-Beijing route had one of the highest load factors of any service launched between Europe and China, moving tourists, trade and investment into the North West.[3]

Most of all, as we recover from the economic shock from Coronavirus, businesses recognise the value of restoring UK connectivity with world markets. Rebuilding consumer confidence in flying in and out of the country will be essential for securing the commercial viability of routes connecting businesses with key trading partners. This will not only benefit carriers and their supply chain, supporting thousands of jobs in aviation and aerospace manufacturing, but crucially the wide range of firms that depend on the people and products that travel on these routes.

Central to this ambition will be establishing an affordable and internationally recognised testing regime that enables easy travel into and out of the country without the need for significant quarantine periods. The government’s planned test and release programme is a start, but to see the volume of travel needed to restart key routes, the UK will need to do more. In advance of the summer season, the business community needs testing systems developed that require minimal quarantine at borders and add very little to the cost of flying. This is achievable with political will combined with the innovation and investment of the private sector. Only then can aviation return to its key role helping firms connect and compete in a global market, ensuring Britain is back open for business.

[1] Steer, Assessment of the value of air freight services to the UK economy, October 2018, p.35.

[2] Centre for Economic and Business Research, February 2020.

[3] Manchester China Forum, The China Dividend – Two Years In, p.7.

Airlines UK and Airport Operators Association respond to the announcement of a ban on international leisure travel as a part of new lockdown measures

Responding to the announcement of a ban on international leisure travel as a part of new lockdown measures, Tim Alderslade, Chief Executive, Airlines UK and Karen Dee, Chief Executive of the Airport Operators Association said:

“This announcement is a 180-degree reversal of policy, since the Government added the Canaries to the travel corridors list just last week.

“Aviation has been devastated by the pandemic and has essentially never had the opportunity to recover. A ban on international travel means airlines and airports, already hamstrung by quarantine, are closed businesses and will require financial support now – which other sectors like hospitality have received – alongside a comprehensive restart package.

“This needs to include immediate additional economic support for the winter and steps to support recovery, including urgent roll-out of a testing regime, business rates relief for airports, and an emergency waiver of Air Passenger Duty that will be essential for enabling and stimulating international travel – absolutely vital for the UK economy – for as long as we are living with this virus. Hundreds of thousands of jobs and our economic recovery are on the line.”