Airports and airlines expect to make huge losses this summer and want more government financial help
Airports are likely to have a bad summer, with far fewer air passengers than they had hoped for. The Airport Operators Association (AOA) have told the government that they might collectively lose £2.6 billion this summer, between April and September, not the recovery they dreamed of. It could be even worse than summer 2020 for them. In summer 2020 there were, at their highest, about <20% of the level in 2019. It is likely to be lower this year. The AOA says “1.6 million jobs in the UK aviation and tourism industries rely on aviation having a meaningful restart.” And “If the government decides it cannot reopen travel more meaningfully, then they should stand ready to give substantial financial compensation to airports and others in aviation and tourism…. As airports remain open for critical services, support should include operational costs, such as policing, air traffic and CAA regulatory costs, and extending business rate relief in full until the end of the tax year.” Airlines UK are also demanding government help, asking for continuation of furlough, extension of repayment terms for any Covid loans, and a new grant scheme for airlines.
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Airports face second summer of £2.6bn revenue loss
by Phil Davies (Travel Weekly)
June 09, 2021
The industry faces a real risk that this summer will be as bad or worse than summer 2020, airports have warned as the government takes an overly cautious approach to reopening international travel.
Airports alone stand to lose at least another £2.6 billion in revenue in summer 2021.
The message came from the Airport Operators Association with the current green list for non quarantine travel representing only 1.7% of 2019 passenger numbers.
Significantly more countries were on the travel corridor list last year compared to what is expected for summer 2021 under the current traffic-light system. Thanks to the larger numbers of countries with a travel corridor, passenger numbers peaked at 22% of 2019 levels in August 2020.
Even with the more liberal travel approach in 2020, UK airports lost out on £2.6 billion revenue between April to September.
With passenger numbers expected to be at best similar but most likely worse, airports stand to lose at least another similar amount in revenue again this year.
AOA chief executive Karen Dee said: “The government’s overly cautious approach to reopening travel has real-world consequences for the 1.6 million jobs in the UK aviation and tourism industries that rely on aviation having a meaningful restart. [This, of course, omits all the jobs created by British people having holiday breaks in the UK, and visiting more UK leisure destinations, and spending more here – rather than abroad. In 2019 the UK “tourism deficit” was about £33 billion, on the government’s own figures. Link ]
“Unless the government makes a meaningful restart of aviation possible by extending the green list at the next review, moving to rapid and affordable tests for returning travellers and following the examples of the EU and the US by reducing restrictions on fully vaccinated passengers, aviation is in for an extremely difficult summer.
“Airports have suffered blow after blow since the start of the pandemic. If the government decides it cannot reopen travel more meaningfully, then they should stand ready to give substantial financial compensation to airports and others in aviation and tourism.
“As airports remain open for critical services, support should include operational costs, such as policing, air traffic and CAA regulatory costs, and extending business rate relief in full until the end of the tax year.
“With the rest of the economy having a real opportunity to return to some normality, jobs in businesses across the economy that need air connectivity for their success are at risk. The government cannot afford to let those go.”
https://travelweekly.co.uk/news/air/airports-face-second-summer-of-2-6bn-revenue-loss
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Airlines bid for furlough to be extended until next May
By Edward Thicknesse (City AM)
10th June 2021
The UK airlines industry has called on the Treasury to extend furlough for sector workers until the end of April next year as the wait for the lifting of travel restrictions goes on.
The UK airlines industry has called on the Treasury to extend furlough for sector workers until the end of April next year as the wait for the lifting of travel restrictions goes on.
After weeks of speculation, the industry’s hopes were dashed in May when the government revealed that just 12 countries and dependencies would be on the UK’s quarantine-free travel list.
The UK’s airports risk losing at least £2.6bn for the second year running this summer under the current traffic light travel system, as more travel and aviation leaders called for the scheme to be scrapped.
And last week dismay turned to rage when ministers elected to remove Portugal, the one large holiday destination, from the list due to a rise in Covid-19 cases.
Now airline bosses are demanding more financial help from the government in lieu of a situation that leaves them “still in effect unable to trade” for a second straight summer.
In a letter to Chancellor Rishi Sunak, Airlines UK boss Tim Alderslade said: “The economic support measures that you have put in place during this crisis have undoubtedly been essential for our sector as revenues have remained near zero for over a year.
“However, the bulk of the Government’s headline £7.2bn of support for UK airlines has essentially been taken on as new debt, compared to a little over £1bn in direct furlough support.
“No sector would be able to continue to accumulate debt in this way for much longer and hope to be able to recover, and critically also be in a position to invest as planned in delivering sustainability objectives, when able eventually to trade again.”
He then called for targeted support for the sector, including the continuation of furlough, and extension of repayment terms for any Covid loans, and a new grant scheme for airlines.
In addition, Alderslade called for the traffic light system to be adjusted on 28 June “if the government is serious about driving economic recovery”.
A government spokesperson said: “We recognise the challenging times facing all sectors of transport as a result of COVID-19, which is why we have put in place a world beating support package, including around £7bn of support benefitting the air transport sector.
“We continue to work with the aviation sector to help them navigate this difficult time, and encourage them to draw on the unprecedented package of support measures previously announced by the Chancellor.”
The letter came as Boris Johnson and Joe Biden agreed to set up a taskforce to look into the restart of UK-US travel as part of a new “Atlantic Charter” between the two nations.
Airlines welcomed the news, saying it was a “first step”, but said the two nations should go further at the weekend’s G7 summit in Cornwall.
“The future development of these schemes, and the benefits they enable, is contingent on the outcome of discussions with the Government on longer-term funding.”
Also Read:
Airline stocks dive and bosses fume after Portugal axed from UK travel ‘green list’
Virgin Atlantic chief exec Shai Weiss said: “We urge Prime Minister Johnson and President Biden to use the G7 Summit to move the US to the UK’s “green list” and repeal the 212F proclamation for UK travellers to the US immediately, and no later than the 4 July.”
Earlier today the UK’s airports warned that they could lose £2.6bn over the summer months if no meaningful changes to the “green list” were made.
https://www.cityam.com/airlines-bid-for-furlough-to-be-extended-until-next-may/
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See earlier:
UK airports to receive financial aid from government before April
The UK Government has said it will financially support airports before the end of March, following the aviation industry’s fervent plea for support due to the new Covid travel restrictions. Aviation minister Robert Courts said: “The Airport and Ground Operations Support Scheme will help airports reduce their costs and we will be aiming to provide grants before the end of this financial year.” (ie. April). Without any initial date, the scheme was announced in November 2020 for the first time. Under the scheme, grants of up to £8m per airport applying will be given to cover fixed costs such as business rates. More details are expected in the coming days. The lobby body, the Airport Operators’s Association, wants help including a temporary exemption from local property taxes, and help with “regulatory, policing and air traffic control expenses.” Robert Courts did not mention any support for airlines, which have benefited from general government furlough programmes; BA and EasyJet have had loans backed by the government’s UK Export Finance. The sector wants restrictions ended by Easter, which is when they usually make money, and for the summer holiday season. Most airlines do not traditionally make much of their money in winter.
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Airports can get up to £8 million in business rates relief – Heathrow wants a lot more
The government’s financial Airport Support Scheme has now opened to applications but was swiftly criticised by Heathrow and other airport operators. Under the scheme, airports and baggage handlers can apply for up to £8m in business rates relief. But Heathrow has a business rates bill of around £120m per year, so the £8 million will cover little of it. Indeed it is less than the money it is burning through in two days – which is around £5 million per day. Holland-Kaye said “the Treasury has yet to explain why it has handed out £3 billion of rates relief to retail businesses that didn’t need it while ignoring the worsening crisis facing our industry.” The government announced the scheme back in November when international travel was banned under the second national lockdown, and we now have the 3r lockdown. Most airports are grateful for the help, but want more – as the £8 million was arranged before the current tight Covid travel restrictions. Thousands of retailers have received government help with business rates, including many that have done very well during the pandemic. Some are returning the money; many are not.
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