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.