Heathrow area risks fate of 1980s mining towns, says airport boss – area too dependent on the airport
Date added: September 13, 2020
Perhaps even more than other airports like Gatwick and Luton, a large part of the economy around Heathrow has become over-dependent on the airport. Now the CEO of Heathrow, John Holland-Kaye has said boroughs like Hounslow risk becoming like “a mining town in the 1980s” with the collapse in air traffic putting tens of thousands of jobs at risk. Many more people work in businesses associated with Heathrow, than directly for the airport itself. In August, Heathrow had around 1.4 million passengers, which is less than 20% of its “normal” amount. People are not flying for leisure, due to the risk of Covid itself, or the need to quarantine. There are few business trips, as they are being replaced by Zoom etc. Many in the aviation sector do not think levels of flying will return to their 2019 levels for 2-3 years, or more – if ever. Heathrow had losses of £1.1bn in the first half of 2020. Recently Heathrow issued formal section 188 notices, allowing it to potentially fire and rehire some 4,700 employees, after months of negotiations with unions representing its directly employed ground staff failed to produce an agreement. Section 188 means the airport can bypass negotiations after a 45-day period has elapsed. There might overall be 25,000 Heathrow-related job losses. . Tweet
Heathrow area risks fate of 1980s mining towns, says airport boss
CEO condemns UK government’s Covid response, saying lack of airport testing risks tens of thousands of jobs
The boss of Heathrow airport has warned that its west London home of Hounslow risks becoming like “a mining town in the 1980s” with the collapse in air traffic putting tens of thousands of jobs at risk.
Heathrow’s chief executive, John Holland-Kaye, urged the government to approve its Covid-19 testing regime to enable more travel, as the airport reported 1.4 million passengers in August, less than one-fifth of its normal traffic for the peak summer month.
“It has really been killed by the quarantine … What we have seen is that when people can fly, they will,” he said. “Other countries – even Jersey – have introduced testing, very successfully. We don’t understand why the government doesn’t do similar things, not just to support aviation but all the businesses that depend on it.”
“Given the lack of passengers, we have to do something and that is the least worst option… We are such as big part of the local economy, if we have large-scale redundancies that would have a similar impact to what we saw with mining towns back in the 1980s, and we want to do everything we can to avoid that,” Holland-Kaye said.
An independent report by Oxford Economics for Hounslow council found the decrease in Heathrow traffic threatened up to 43,000 jobs in the borough, and warned of a £200m hit to the economy causing “extreme hardship for local families and communities”.
Holland-Kaye suggested British Airways could fail and that “no one was immune”, warning: “Alitalia went bust, and now if you want to get to Italy on a long-haul route you mainly have to fly via Germany. That could happen in the UK, and would destroy any hope of a global Britain you may have.”
He added: “We don’t need bailouts, we just need a sensible testing regime. If we don’t take steps to open with testing we will see UK airports and airlines going bust – and once we’ve lost that capacity we will never get it back.”
Heathrow has established a facility with Swissport in Terminal 2 that can test up to 15,000 passengers a day with standard Covid PCR tests, and it has also trialled three rapid tests. One based on microscopic computer analysis of saliva took less than 20 seconds to give a result and cost less than £10 per test, Holland-Kaye said.
“Only the government can decide that a test is good enough to allow people into the country, but this is a British company with potentially world-leading technology … if it could work we should be fast-tracking this,” he added.
Coronavirus pandemic has cost airport £1bn as passenger numbers fall over 80%
Heathrow has told long-serving frontline staff they must take a pay cut of 15-20% or face job losses, with the aviation sector’s hopes of a quick summer recovery from the pandemic dashed.
On Wednesday the airport issued formal section 188 notices, allowing it to potentially fire and rehire some 4,700 employees, after months of negotiations with unions representing its directly employed ground staff failed to produce an agreement.
Although Heathrow insisted it was not looking to cut jobs, the chief executive, John Holland-Kaye, had previously suggested that up to one in four of its jobs could go, and up to 25,000 across the airport, including those employed by other companies – not least British Airways.
Heathrow has already laid off one in three managers and imposed 20% pay cuts on office staff.
The section 188 notices allow Heathrow to bypass negotiations after a 45-day period has elapsed, and then offer employees new contracts. All will be told they are to be employed at a market rate – meaning the higher paid staff could face pay cuts of up to £10,000 if they choose to stay on.
Heathrow said it would soften the blow by offering lump sums to cover the initial losses, as well as enhanced voluntary redundancy to those who preferred to leave.
A Heathrow spokeswoman said: “Covid-19 has decimated the aviation industry, which has led to an unprecedented drop in passenger numbers at Heathrow, costing the airport over £1bn since the start of March. Provisional traffic figures for August show passenger numbers remain 82% down on last year and we must urgently adapt to this new reality.”
She said the offer still guaranteed a job at the airport for anyone who wished to stay.
The Unite union said it was “deeply concerned” and urged the airport to continue talks, adding that Heathrow was “an incredibly wealthy company … at the start of the pandemic it boasted of a £3.2bn war chest. These attacks on pay are not about survival but introducing measures to boost future profits.”
Heathrow “to slash staff pay by up to a third” becoming a “low cost employer”after collapse in air travel
August 16, 2020
Heathrow staff are being asked to accept pay cuts of up to 37% and will lose their final salary pension scheme. It will also end paid breaks and allowances, worsen redundancy terms, and refuse to honour a pay rise. The airport wants to slash pay and conditions for its 7,000 workers in a bid to become a low-cost employer, according to union chiefs – an allegation denied by management. Air travel demand is currently low, (88% lower in July 2020 than in July 2019) and not expected to rise much in the short term. The aviation sector cannot afford to pay so many staff, when it has little income. Heathrow said it has been forced to take action now to protect jobs. But the union Unite (which has always been an enthusiastic backer of Heathrow and its expansion plans) has told its members that the airport is acting out of “greed, not need” and said it was using the pandemic as a smokescreen to cut pay and conditions. It added that Heathrow paid £100m in dividends in April. Unite says John Holland-Kaye told unions that he wanted to make the business a “low-cost employer” during a meeting on July 30th. Many staff working around Heathrow are not directly employed by the airport, but associated businesses. There could be over 20,000 job losses in these companies.