Heathrow, Gatwick and Manchester airports have warned that they may have to close down operations unless there is government intervention to help them weather the coronavirus crisis.
The call came as the International Air Transport Association (Iata) said about only 30 of more than 700 airlines operating commercial flights around the world were likely to survive the next few months without help.
The three UK airports signed a joint letter to the prime minister warning that they may “have to close passenger facilities and halt operations” and that hundreds of thousands of jobs were “instantly at real risk”. Heathrow, Britain’s biggest airport, employs 70,000 people directly.
The UK-based Airport Operators Association (AOA) also said on Tuesday that other airports could go out of business within weeks, and called for the immediate suspension of taxes and business rates as well as the provision emergency financing, as passenger traffic through airports has plummeted. The call came before the UK government advised against all non-essential foreign travel.
European members of the Airports Council International (ACI) wrote to ministers to request a continent-wide response to the crisis, noting that EU, UK and EEA airports have had 100 million fewer passengers than expected in 2020.
In Italy, where measures to combat the outbreak were initiated within Europe, passenger traffic is down by 90%, ACI said. Across the continent, numbers were 54% lower last week (9-15 March), after a 24% drop the previous week, with the situation rapidly escalating.
Dee said airports were taking immediate and drastic action to cut costs but the government would need to provide additional support through financing, guarantees, grants and tax relief.
London Gatwick, the UK’s second largest airport, announced on Tuesday it would cut 200 temporary jobs, end night flights and cut executive pay, as part of a package of measures to protect the business. Gatwick’s chief executive, Stewart Wingate, warned that “other serious measures are likely”.
Wingate said: “Gatwick is a resilient business, but the world has changed dramatically in recent weeks and we have been forced to take rapid, decisive action to ensure that the airport is in a strong position to recover from a significant fall in passenger numbers.”
After the US banned visitors from the UK and travel restrictions were put in place in Europe and beyond, Gatwick had just 238 flights scheduled to depart on Tuesday, about a third of its peak capacity.
On Monday, MAG, the owner of Manchester, London Stansted and East Midlands airports, said it would be taking measures including reduced working hours, temporary pay cuts and temporary layoffs. Its chief executive, Charlie Cornish, said the government needed to help the industry to “make sure it is still there and ready to help the economy recover once this is all over”.
ACI Europe said Europe’s airports had lost €2bn (£1.8bn) in revenue for the first quarter, even before factoring in the Schengen entry ban, and losses would deepen in the coming months.
It said some had closed terminals and would shut down all operations, “bracing for a near total collapse of their traffic, connectivity and revenues”.
With many big airlines preparing to ground most of their fleets, Iata warned that most carriers were in danger of bankruptcy.
Its chief economist, Brian Pearce, said: “The top 30 airlines have reduced their debts – but the vast majority still have high levels of debt, which means there are fixed obligations even in the absence of revenues.
“Some 75% of airlines we looked at had less than three months of cash to pay fixed costs … the median had two months of cash at start of year.”
Those reserves were largely spent, Pearce indicated, and travel restrictions were expected to last at least until the end of May.
A separate report from the Centre for Aviation says most airlines could go bankrupt by May. Iata’s director general, Alexandre de Juniac, said that “it was logical” to infer that conclusion.
De Juniac said a large amount of cargo capacity in the belly of passenger planes would also be lost – space typically used for high-value goods as well as fruit and vegetables. Grounding flights would also mean “less critical availability for medical equipment, medical staff or technical people to fight the virus”.
He urged “strong and swift” action from governments, adding: “We realise airlines are not the only sector impacted … But if we want this crisis to come to an end fast and quickly from an economic standpoint, the need for a strong airline sector to provide the resources to transport business people, goods and tourists is absolutely critical.”
Less than two weeks ago Iata said in its worst-case scenario, airlines would lose $113bn (£93bn) in revenues in 2020. Pearce said: “We’re already there and beyond … they are clearly worse than this.”
At the start of the year, Iata had forecast an aggregate $29.3bn global profit for airlines this year. Asked to update, Pearce said: “At the moment we’re concerned that large parts of the industry might not be there.”
UK’s biggest airports ask for help as possible closure looms
March 17, 2020 (Business Financial Post)
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LONDON — Britain’s biggest airports including Heathrow and Gatwick have written to Prime Minister Boris Johnson to ask that any government support for the aviation industry should include help for airports, which they said could have to shut completely.
The government is expected to unveil a rescue package later on Tuesday for businesses like airlines and pubs which are threatened with collapse by the coronavirus outbreak.
A group of airport chiefs said in a letter to Johnson that their businesses were being severely impacted by the lack of flights and that jobs could be lost. They asked to be included in any aviation sector support and for a meeting with the transport minister.
“We may have to close passenger facilities and halt operations,” the group said.
“We would therefore ask you to make the needs of Britain’s airports a top government priority at this time and make clear your commitment to supporting the aviation industry.”
The letter was signed by the CEO and chairman of Heathrow, Britain and Europe’s busiest airport, as well as the CEO and chairmen of Gatwick, Britain’s no.2 airport, and Manchester, its no.3 airport, as well as industry body the AOA.
(Reporting by Sarah Young; editing by Stephen Addison)
Coronavirus updates: Stansted Airport staff to be temporarily laid-off and have pay cut after fall in passenger numbers
The CEO of MAG called the outbreak ‘the greatest threat the UK’s travel sector has ever faced’
Stansted Airport is set to introduce a series of emergency measures including ‘temporary lay-offs’ as the coronavirus crisis hits air travel.
In a statement released today (Monday March 16), Charlie Cornish, Chief Executive Officer of MAG, owners of London Stansted Airport, said the coronavirus outbreak had led to a ‘rapid and unprecedented reduction in travel.’
As a result, he said, airports across the UK are currently seeing much lower passenger numbers.
While peak demand is expected to return after the outbreak passes, the immediate downturn in demand has required the airport to take emergency action.
Mr Cornish said: “Over the next few days we will be consulting with our colleagues and unions and introducing measures to reduce our costs and preserve the Group’s resources at this critical time.
“These will include enforced annual leave, reduced working hours, temporary pay cuts and temporary lay-offs. Our Executive team is taking a pay cut with immediate effect and we have frozen recruitment and paused capital expenditure.
“These are difficult decisions for MAG and they have not been taken lightly. We recognise the impact they will have on our people and we will be consulting with our colleagues.
“Our aim will always be to protect jobs wherever possible, and we need to take these steps now to ensure the company’s future.
“It is too early to predict with any accuracy the long-term effects of this crisis. We are seeing many of our airlines and supply chain partners make similar announcements and we are doing what we need to do in the face of an unpredictable and fast-moving situation.
He also called the outbreak ‘the greatest threat the UK’s travel sector has ever faced,’ calling on the government to take decisive action to ‘make clear its support’ for the industry.
He said: “The UK depends on air travel to supports its economy. The Government must stand behind the aviation industry to make sure it is still there and ready to help the economy recover once this is all over.
“We will continue to monitor the situation and make further announcements on MAG’s operations as the COVID-19 situation develops.”
Coronavirus: Airport staff face temporary lay-offs and pay cuts
16 March 2020
New measures will be introduced to reduce costs, Manchester Airports Group says
Staff at three airports in England face temporary lay-offs and pay cuts amid the coronavirus outbreak.
The Manchester Airports Group (MAG) will consult with workers and unions over new measures to reduce costs.
“Our aim will always be to protect jobs wherever possible, and we need to take these steps now to ensure the company’s future,” said Charlie Cornish, chief executive officer at MAG.
The group operates Manchester, London Stansted and East Midlands airports.
Staff may have to take enforced annual leave and work reduced hours under the new plans.
The executive team will take a pay cut with immediate effect and the company has frozen recruitment and paused capital expenditure.
Mr Cornish said the the Covid-19 outbreak “has led to a rapid and unprecedented reduction in demand for air travel”.
“This temporary and dramatic downturn requires us to act now to protect our position at this critical time.”
Mr Cornish called on the government “to take decisive action now to make clear its total and unwavering support for airports, airlines and other travel companies”.
“The UK depends on air travel to supports its economy,” he said.
“The government must stand behind the aviation industry to make sure it is still there and ready to help the economy recover once this is all over.”
Boris Johnson has said people in the UK should avoid “non-essential” travel and contact with others to curb coronavirus, as the country’s death toll hit 55.
The prime minister said people should work from home where possible as part of a range of stringent new measures.