BA has been trying to get some jet fuel made from domestic waste that would otherwise go to landfill, so it can claim it is using “low carbon” fuels. There were plans for a plant in east London, by Solena, back in 2014 but that never got off the ground; Solena went bust in October 2015. Now BA and Shell and Velocys are hoping for a plant on an 80-acre site on Humberside, to convert waste that would go to landfill, into jet fuel. However, Natural England are worried it could harm local wildlife and have filed an objection. Velocys says the plant would turn household waste into 60 million litres of “low-carbon” jet fuel every year. The project is backed by £4.5m of investment from Shell and British Airways, alongside a £434,000 grant from the Department of Transport. In a letter dated 20 February 2020 Natural England said it objects to the development because trucks ferrying waste to the site could increase nitrogen oxide levels – which can cause serious health impacts for humans and wildlife. It is also concerned construction and waste from the site could disturb nearby habitats for rare birds. It is now for North East Lincolnshire Council to decide whether to approve the scheme. . Tweet
Natural England objects to proposed green jet fuel plant backed by BA and Shell
First of its kind plant could slash carbon emissions from flights, but Natural England are worried it could harm local wildlife
By Madeleine Cuff (The i) Thursday, 2nd April 2020
Plans to build a low-carbon jet fuel plant on the Humber Estuary are in jeopardy after Natural England filed an objection to the development.
Developer Velocys wants to develop Europe’s first full scale green jet fuel plant in Lincolnshire, turning household waste into 60 million litres of “low-carbon” jet fuel every year.
The project is backed by £4.5m of investment from Shell and British Airways, alongside a £434,000 grant from the Department of Transport.
But Velocys’ attempts to gain planning permission for the 80-acre site have stalled after Natural England filed an objection to the plans in February.
In a letter dated 20 February 2020 Natural England said it objects to the development because trucks ferrying waste to the site could push up nitrogen oxide levels – polluting gases that can cause serious health impacts for humans and wildlife. It is also concerned construction and waste from the site could disturb nearby habitats for rare birds.
The proposed development lies next to protected wet grassland and open water habitats, where birds such as lapwings, curlews, teals, egrets and avocets roost and feed.
Natural England has demanded a more detailed assessment of the development’s potential impact on air quality and wildlife before it considers changing its mind.
“Natural England notes that the application site is located in close proximity to the Humber Estuary [Site of Special Scientific Interest],” it warned. “Based on the plans submitted, Natural England considers that the proposed development could have potential significant effects on the interest features for which the site has been notified.”
The objection does not prevent North East Lincolnshire Council approving the scheme, but it does make winning the green light much trickier for Velocys. It has already led to significant delays to the scheme, which had expected to receive planning approval by Autumn 2019.
Velocys insists the scheme could be built and operated without significant impacts on human health or local wildlife, and argues the jet fuel would save 80,000 tonnes of CO2 emissions every year from flights.
It told i it has met with Natural England to discuss its concerns, and said it was “confident” the project would progress. “This is a complex and unique development, the first of its kind on this scale in Europe, so it is essential that appropriate consultees thoroughly review all information,” a spokesperson said.
Paul Duncan, North Yorkshire and Lincolnshire Area Manager for Natural England, told i: “We recognise the site’s potential benefits and we have not objected outright to it. What we have done is request more information about work to mitigate potential damage to the local area and wildlife, which is internationally recognised for its precious natural heritage and rare bird species.”
Yet another “first” household & commercial waste to aviation fuel plant planning application – Velocys, Shell, BA
August 27, 2019
Altalto, a collaboration between Velocys, British Airways and Shell, has submitted a planning application for a plant that turns waste into so-called “sustainable” aviation fuel. The proposed plant near Grimsby would take hundreds of thousands of tonnes of household and commercial solid waste destined for landfill or incineration. That would be converted into fuel, to be used by the aviation industry (some could be used for road vehicle fuels…). The scheme is claiming it would “reduce reduce net greenhouse gases by 70% compared to the fossil fuel equivalent.” The company says the fuel also improves air quality, with up to 90% reduction in particulate matter from aircraft engine exhausts and almost 100% reduction in sulphur oxides – but gives no explanation how. It also claims the process produces less air pollution that if the waste was incinerated or landfilled (but gives no details). Usual blurb from British Airways (desperate to try to make out that aviation will emit less CO2 in future, while continuing to grow) about “Sustainable fuels can be a game-changer for aviation…” blah blah… BA had proposed a similar plant in Essex which was cancelled due to lack of funding in 2016.
DfT, always trying to make aviation growth look “green”, to pay £434,000 to fund waste-to-jetfuel project
June 18, 2018
A project to turn landfill waste into (quotes) “sustainable” jet fuel has received a major boost by securing almost £5m of funding from the government and industry backers. The DfT has committed £434,000 to fund the next stage of the project, which will involve engineering and site studies to scope potential for a waste-based jet fuel plant in the UK. This will take hundreds of thousands of tonnes of waste – otherwise destined for landfill – and convert it into jet fuel. The project is being led by biofuels firm Velocys, which has committed £1.5m to the next phase of development. The scheme has also secured a further £3m from industry partners, including Shell and British Airways. BA hopes to use the fuel, to claim it is cutting its carbon emissions (while continuing to grow, burning ever more fuel). The DfT is keen to give the impression that UK aviation expansion is fine, if some biofuels, or alternative fuels, are used. The funding for the Velocys project is part of £22m alternative fuels fund from the government, to advance development of “sustainable” fuels for aviation and freight transport. As of April 2018 renewable jet fuel also qualifies for credits under the Renewable Transport Fuel Obligation (RTFO).
Solena, the company meant to be producing jet fuel from London waste for BA, goes bankrupt
October 29, 2015
In February 2010 it was announced that British Airways had teamed up with American bioenergy company Solena Group to establish “Europe’s first” sustainable jet fuel plant, which was set to turn London’d domestic waste into aviation fuel. The plan was for BA to provide construction capital for a massive plant somewhere in East London. BA committed to purchasing all the jet fuel produced by the plant, around 16 million gallons a year, for the next 11 years at market competitive prices. BA had hoped that this 2% contribution to its fuel consumption – the equivalent to all its fuel use at London City airport – would give it green credibility, and it would claim it cut its carbon emissions. The timescale for the plant to be built kept slipping. Nothing has been heard of it for a long time. Now it has been announced that Solena has gone into bankruptcy in the USA. It was never clear why, if genuinely low carbon fuels could be produced from London’s waste, why these should not be used for essential vehicles in London – and why they would instead become a PR exercise for an airline. British Airways and the company Velocys are listed as creditors of Solena.
Historically the GMB union, which has the most members at Heathrow, have lobbied strongly all along the way for Heathrow expansion. They hope for more jobs. Even better paid ones. But Heathrow has often not done much to help its workers. With a struggle, in 2018, the GMB managed to get Heathrow to agree that contracted workers would be guaranteed London Living Wage of £10.55 per hour by April 2020. Now the GMB says workers are devastated to learn that “Heathrow Ltd have informed contract companies within its direct supply chain that is reneging on its agreement to fund implementation of the London Living Wage to its employees that was promised to workers from April 2020 onwards.” GMB says this is unfair. Heathrow is currently only working (from 6th April) with one runway due to the dramatic decline in air travel due to Covid-19. The GMB says Heathrow much honour its agreement, to ensure workers (security, cleaning) etc still working at the airport – employed by outsourced contractors – get the Living Wage from April 2020. Workers were expecting this rise in their wage packets this April. . Tweet
GMB call on Heathrow to reverse “kick in the teeth” reneging on paying London Living wage from April 2020
April 2, 2020
Workers are totally devastated and crushed by being hit with a sledgehammer with this unfair news says GMB London
GMB, the union for aviation workers, is demanding that Heathrow Ltd honour its agreement to fund London Living Wage of £10.75 per hour to its low paid workers at the airport employed by outsourced contractors from April 2020.
This call comes in response to Heathrow Ltd who stated that ” it is a proud London Living Wage employer and champions the Living Wage Foundation’s work in line with their values and commitments.
This is a very important commitment to us, but we understand the financial strain that faces many of our suppliers, Therefore, we have taken the very difficult decision to pause London Living Wage implementation across the supply chain”.
Perry Phillips, GMB Regional Organiser for Aviation at Heathrow, said: “GMB has learnt that Heathrow Ltd have informed contract companies within its direct supply chain that is reneging on its agreement to fund implementation of the London Living Wage to its employees that was promised to workers from April 2020 onward.
“This is a huge kick in the teeth for GMB members who continue to work for contracted companies such as ISS terminal cleaning and Mitie security. These are workers who during this time of the coronavirus pandemic have put their lives on the line to provide a safe service to passengers from all over the world. They are now being told that the agreement to be paid the London Living Wage is to be temporary suspended.
“This is both unfair and down right outrageous. Year on year Heathrow has continued to announce record profits and revenue where millions have been paid out to shareholders. Paying workers who live on very low wages should be a priority.
“Workers are totally devastated and crushed by being hit with a sledgehammer with this unfair news.
“GMB members and staff who work for Mitie security and ISS terminal cleaning have continued to work and are still working to ensure that the Airport is clean and safe and have also put their own lives on the line and should be rewarded now with what was promised to them. This still affordable to Heathrow and those companies that are still working and providing a service to the Airport during this coronavirus pandemic.
“I am calling on Heathrow to reconsider its decision to stop the implementation of the London Living Wage rise and to do the right thing by honouring its agreement and pay it to those workers who are expecting it in their wage packets from April 2020.”
Article By GMB Union @GMB_union email@example.com
Hundreds are set to join a mass protest at Heathrow to call for airport bosses to pay all 90,000 workers a wage they can live on.
The ‘flying pickets’ demonstration, featuring live music and dancing, takes place as follows:
April 27, 2019, from 10.30am to 14.30pm Capital Place, 120 Bath Road, Heathrow UB3
Following GMB’s long-running campaign, last year, Heathrow announced all contracted staff working at the airport would be paid the London Living Wage of £10.55 per hour by 2020.
Now GMB is urging the airport to make sure all staff – including contractors – are paid at least the London Living Wage (Currently £10:55 per hour)
2018 was the busiest year in Heathrow’s history, bringing in £3 billion revenue and 80.1m passengers.
Perry Phillips, GMB Regional Organiser, said:
“GMB is demanding the London Living Wage for all Heathrow workers.
“We call on Heathrow to honour its commitments and ensure that not only directly employed staff, but also the thousands of workers in the airport’s supply chain are paid a wage they can live on. Contractors at the airport are not signing up to Heathrow’s commitment, meaning workers and their families are still suffering as a result of being paid a poverty wage.
“Heathrow is thriving, but that success is built on the back of 1000s of workers who keep the airport clean, safe and operational.
Heathrow’s shareholders get £500m as profits rise (including income of £126m from car parking)
March 6, 2019
IAG, the owner of British Airways, is angry that Heathrow has paid out £500 million in dividends to its foreign investors while charging its airline customers more. IAG says the dividend payments – now totalling £3.5 billion since 2012 – make Heathrow more costly for airline passengers (so slightly deterring them from flying perhaps). Heathrow said “It is right that our shareholders receive returns in record years and it will ensure we expand whilst keeping airport charges close to 2016 levels.” Heathrow’s top shareholders include the Qatar Investment Authority, Singapore’s GIC and the China Investment Corporation. Its largest single investor is Spain’s Ferrovial. The only UK shareholder is the Universities Superannuation Scheme (USS) with a 10% stake. Heathrow’s figures out last week show revenue growth of 3% to £2.97 billion in 2018 with 80.1 million passengers (up 2.7% from 78 million). Car parking income was £126 million (up 5% from £120 million in 2017). Retail revenue per passenger was £8.94 (up 5.8% from £8.45 in 2017). Total retail income was £716 million (up 8.6% from £659 million in 2017). Heathrow paid £70 million (2017: £53 million) in corporation tax. Out of £2,970 million total revenue.
How Heathrow has been getting away with paying so little tax to the UK government March 9, 2019
9th March 2019
UK tax rules have allowed airports like Heathrow to pay far less tax than they should. It is estimated that Heathrow’s foreign owners have been able to get a tax break of perhaps £120 million per year from the UK government. And the airport’s shareholders (which include the governments of China, Qatar and Singapore – with only 10% by the USS being British – .have paid themselves about £3 billion in dividends in 5 years. Rules on how firms can cut tax bills due to large debt interest payments began in 2017, but the Treasury has given an exemption for infrastructure projects like Heathrow. The think-tank, Taxwatch, said: “In the case of Heathrow, the benefits of the exemption appear to flow overwhelmingly to the owners of the company.” …”The company was bought using a huge amount of debt. Instead of paying back the debt themselves, the new owners managed to push this liability on to Heathrow, making the company liable for large interest payments… The large debt repayments wiped out the company’s pre-tax profit.” Revenues at Heathrow have risen to £2.9billion but its owners have paid little corporation tax, due to massive debts. Between 2007 and 2014 the group reported a total pre-tax loss of more than £2 billion, and paid just £15 million in corporation tax. In the past 3 years it declared pre-tax profits of more than £1 billion, leading to corporation tax payments of £122 million (ie. £70 million in 2018 and £53 million in 2017.
On 27 February 2020 the Court of Appeal declared the Government’s Airports National Policy Statement (ANPS) to be illegal as the Government had not taken into consideration their commitments on climate under the Paris Agreement.
The Court ruling means that the Government must either withdraw the ANPS or seek to amend it. This has never been done before so the Government will be breaking new ground and I know I’m not the only one concerned at the amount of discretion that is given to the Secretary of State [Grant Shapps] in this process – though at least Mr Grayling is no longer in office.
Expansion at Heathrow would have had a negative impact on the regions of the UK. According to a recent report by the New Economics Foundation which analysed DfT data, by 2050 as many as 27,000 jobs and £43bn in GDP growth would be displaced from the regions to London and the South East.
This ruling and the forthcoming Aviation White Paper [Aviation Strategy] provide the opportunity for the Government to have a rethink about its entire aviation policy, particularly with regard to any future airport expansion.
The Committee on Climate Change have recommended that the Government can only permit 25% growth in aviation by 2050 if we are to meet our climate targets. However, this will still require a faster reduction in carbon emissions in other sectors of the economy. [At least 90% CO2 cuts on 1990 levels, while aviation is allowed to more than double theirs].
The DfT published last week its Transport Decarbonistion strategy which revealed that UK aviation emissions in 2018 were at an all-time high, a total of 38.5MtCO2.The strategy seeks to enable passenger growth of 73% with emissions remaining roughly the same in 2050 as today. This will be done through technological solutions that either do not yet exist or will not be commercially viable within the timeframe required.
The aviation industry’s own plans show very little progress in the next five years which will forcing larger carbon reductions on other sectors of the economy which will have a particularly negative impact on those regions with large manufacturing sectors. In 2010 the aviation industry pledged to source 10% of fuels from sustainable sources in 2020. Yet by 2018, the industry had managed to source a grand total of 0.002%.
This cannot be left to the market to solve. The idea that we can carry on as normal contradicts all the evidence showing that we must act now to protect our climate. The Government should take this opportunity to put people and planet before profit by including international aviation and shipping emissions in the UK’s carbon budgets as soon as possible. [Currently they are not in the 5 yearly carbon budgets, but just “taken account of”].
Government is considering a flat carbon tax, yet this is regressive and would hurt the poorest in society the hardest as well as having a disproportionate impact on the regions outside of London and the South East. In my view it is vital that this if any growth in aviation is to be permitted then it has to be distributed evenly around the regions and nations of the UK.
The Government are rightly focused on responding to the coronavirus crisis. However, any financial support for the aviation industry must be targeted at workers and not shareholders.
There is not a strong case for aviation to get preferential treatment. The only special consideration that is credible should be on providing the goods and services that the population use and need every day. If this means that the Government has to take a financial stake in an airline or airport to ensure that our aviation infrastructure remains intact to deliver the goods that our NHS requires then that is a price worth paying many times over.
Any Government support for the aviation industry should also be conditional on a strong commitment to future operations taking place in line with our environmental commitments. Financial measures that appear designed to boost aviation demand or support failing businesses simply cannot be justified in light of the climate crisis.
The carbon emissions of EU airlines grew in 2019. There will be a steep fall in their emissions for an unknown amount of time, due to the Covid-19 pandemic. But air passenger numbers repeatedly broke records in the aftermath of global shocks such as the 2008 financial crisis, the September 11 attacks, the Gulf War and the SARS outbreak. This will happen again this time, unless aviation carbon is taxed and regulated. Governments must break that cycle of crisis+growth by sticking with the European Green Deal commitment to rein in emissions growth. In Europe political momentum has been gathering to end both airlines’ tax exemption and the free pollution permits they receive in the EU’s ETS. The EU would like airlines to use lower carbon fuels, if these can be located (they are scarce and expensive). The EU is moving to curb airline emissions due to serious doubts over the UN’s controversial/ineffective CORSIA scheme, which will allow airlines to continue increasing their CO2 emissions by buying ultra-cheap offsets instead of reducing their own CO2. . Tweet
Big airline polluters grew emissions in 2019 ahead of expected COVID drop
Fourteen of the 20 biggest polluting airlines grew their CO2 emissions within Europe in 2019 – according to official EU figures released today – ahead of an expected fall this year. In the past the 20 airlines’ emissions accounted for almost three-quarters of all airline CO2 within Europe.
Transport & Environment (T&E) said aviation pollution is likely to grow again once COVID restrictions are lifted unless the sector is required to take up green technology and pay taxes on its fuel.
The 14 carriers released an extra 1.6 million tonnes (Mt) of CO2 last year. The European Commission will publish the airline sector’s total emissions later this month.
Andrew Murphy, aviation manager at T&E, said:“Airlines grew their emissions right up until this crisis. But this current bust will be followed by another boom in CO2 so long as aviation emissions remain untaxed and unregulated. Governments must break that cycle by sticking with the European Green Deal commitment to rein in emissions growth.”
While airlines’ emissions will fall this year due to COVID groundings, they are expected to bounce back once the global health crisis has passed. Passenger numbers have repeatedly broken records in the aftermath of global shocks such as the 2008 financial crisis, the September 11 attacks, the Gulf War and the SARS outbreak, industry data  shows.
T&E said governments should support aviation workers through the current crisis, but airlines must be required to start paying taxes and use cleaner fuels once conditions improve.
In Europe political momentum has been gathering to end both airlines’ tax exemption and the free pollution permits they receive in the bloc’s emissions trading system. The European Commission last week said it was exploring requiring airlines to start using cleaner fuels such as synthetic e-fuels.
Europe is moving to curb airline emissions due to serious doubts over a controversial UN offsetting scheme for aviation. Known as Corsia, the scheme will allow airlines to continue growing their emissions by buying ultra-cheap offsets – where they invest in environmental projects, such as a hydrodam project which later collapsed, instead of reducing their own carbon footprint.
Notes to editors:  The 20 airlines were the biggest emitting carriers in 2018. In 2019, five of these airlines – Alitalia, TUI Airways, British Airways, Eurowings, and Norwegian Airlines – decreased their emissions. One carrier, SAS, did not report its pollution.
Support airlines in crisis, but on condition they start paying tax and take up green technology – T&E
EU transport ministers discussing Covid-related financial aid to airlines must make bailouts in these hard times conditional on carriers starting to pay tax once conditions improve and taking up green technology, sustainable transport group Transport & Environment (T&E) has said. The ministers discussed measures to shore up the aviation sector in an emergency meeting via video conference today.
By Eoin Bannon (Transport & Environment)
March 18, 2020
The aviation industry employs tens of thousands of people across the EU, and financial support must be prioritised for the paychecks of workers whose jobs are in danger, T&E said.
But state aid to airlines should only be approved if countries ensure they will later start to pay tax and contribute to severely strained public coffers. Carriers have long been exempt from fuel taxation and VAT on international flights in Europe. Their jet fuel tax exemption is valued at €27 billion a year. They have also been slow to use cleaner fuels such as synthetic kerosene and waste-based biofuels.
Andrew Murphy, aviation manager at T&E, said: “Airlines calling for public support in bad times should accept they need to start paying taxes in good times. EU governments should make airline bailouts conditional on carriers paying fuel, ticket and other taxes once the crisis has passed. They should also require airlines to start using low-carbon fuels once conditions improve. Public money should support the technologies of the future and not reinforce the mistakes of the past.”
There are lots of comments in the media about how society recovers from the Covid-19 pandemic, and the unique opportunity the crisis has provided for a re-think of many aspects of our economies. Governments and business etc will want to go for maximum economic growth, as soon as the crisis has been dealt with. The climate and ecological crises the earth faces will not have gone away, and will continue to worsen unless decisive and effective action is taken. Time may have been wasted on cutting carbon emissions, due to the virus crisis. There is a risk of environmental constraints being abandoned, in the rush for a return of economic growth. But there is also talk of the de-growth economy – slowing of growth in sectors that damage the environment, such as fossil fuel industries, and strengthening others, until the economy operates within Earth’s limits. Such a transformation would be profound, and so far no nation has shown the will to implement it. Coronavirus has caused unprecedented and rapid societal changes, and social constraints that would have been considered unimaginable just 2 months ago. There are practical lessons and opportunities we could take away from the coronavirus emergency as we seek to tackle climate change, though that is neither short-term, nor rapidly overcome. . Tweet
By Natasha Chassagne, University Associate, University of Tasmania
Every aspect of our lives has been affected by the coronavirus. The global economy has slowed, people have retreated to their homes and thousands have died or become seriously ill.
At this frightening stage of the crisis, it’s difficult to focus on anything else. But as the International Agency has said, the effects of coronavirus are likely to be temporary but the other global emergency – climate change – is not.
Stopping the spread of coronavirus is paramount, but climate action must also continue. And we can draw many lessons and opportunities from the current health crisis when tackling planetary warming.
A ‘degrowing’ economy
S&P Global Ratings this week said measures to contain COVID-19 have pushed the global economy into recession.
Economic analyst Lauri Myllyvirta estimates the pandemic may have reduced global emissions by 200 megatonnes of carbon dioxide to date, as air travel grinds to a halt, factories close down and energy demand falls.
In the first four weeks of the pandemic, coal consumption in China alone fell by 36%, and oil refining capacity reduced by 34%.
In many ways, what we’re seeing now is a rapid and unplanned version of economic “degrowth” – the transition some academics and activists have for decades said is necessary to address climate change, and leave a habitable planet for future generations.
Degrowth is a proposed slowing of growth in sectors that damage the environment, such as fossil fuel industries, until the economy operates within Earth’s limits. It is a voluntary, planned and equitable transition in developed nations which necessarily involves an increased focus on the environment, human well-being, and capabilities (good health, decent work, education, and a safe and healthy environment).
Such a transformation would be profound, and so far no nation has shown the will to implement it. It would require global economies to “decouple” from carbon to prevent climate-related crises. But the current unintended economic slowdown opens the door to such a transition, which would bring myriad benefits to the climate.
The idea of sustainable degrowth is very different to a recession. It involves scaling back environmentally damaging sectors of the economy, and strengthening others.
A tale of two emergencies
Climate change has been declared a global emergency, yet to date the world has largely failed to address it. In contrast, the global policy response to the coronavirus emergency has been fast and furious.
There are several reasons for this dramatic difference. Climate change is a relatively slow-moving crisis, whereas coronavirus visibly escalates over days, even hours, increasing our perception of the risks involved. One thing that history teaches us about politics and the human condition in times of peril, we often take a “crisis management” approach to dealing with serious threats.
As others have observed, the slow increase in global temperatures means humans can psychologically adjust as the situation worsens, making the problem seem less urgent and meaning people are less willing to accept drastic policy measures.
Key lessons from coronavirus
The global response to the coronavirus crisis shows that governments can take immediate, radical emergency measures, which go beyond purely economic concerns, to protect the well-being of all.
Specifically, there are practical lessons and opportunities we can take away from the coronavirus emergency as we seek to tackle climate change:
Act early: The coronavirus pandemic shows the crucial importance of early action to prevent catastrophic consequences. Governments in Taiwan, South Korea and Singaporeacted quickly to implement quarantine and screening measures, and have seen relatively small numbers of infections. Italy, on the other hand, whose government waited too long to act, is now the epicentre of the virus.
Go slow, go local: Coronavirus has forced an immediate scale-down of how we travel and live. People are forging local connections, shopping locally, working from home and limiting consumption to what they need.
Researchers have identified that fears about personal well-being represent a major barrier to political support for the degrowth movement to date. However with social distancing expected to be in place for months, our scaled-down lives may become the “new normal”. Many people may realise that consumption and personal well-being are not inextricably linked.
The global changes to the aviation sector, caused by Covid-19, have been rapid and radical. It would have been impossible back in January to anticipate how many flights would be grounded, how air travel demand would sink, and how many airlines would be struggling to stay solvent. In a thoughtful piece by the AEF (Aviation Environment Federation), they consider how aviation policy needs to be re-thought, when the virus crisis is over. It is an opportunity to re-think society’s relationship to air travel, in a world that has been woken up to the realities of a global pandemic, and its consequences. Even when the sector hopes, post-virus, to get back to “business as usual” flying, the long-term danger of climate breakdown remains – and the threat worsens. The AEF says it is time to cease aviation exceptionalism, and the special treatment is gets on environmental policies and regulations. This needs to change. And there should not be measures to cut aviation tax, as demanded by the industry, that increase air travel demand. That is not justifiable. Covid-19 has demonstrated the desire, by millions, to look after and care about the welfare of others. Perhaps this virus wake up call could bring the dawning of a more responsible age. .
Coronavirus may prove to be the biggest shock ever seen to the aviation industry. Some airports could close, while airlines are cutting services by 80% or more as a result of travel restrictions and are talking about imminent bankruptcies. Virgin Atlantic, whose majority shareholder is billionaire Richard Branson’s Virgin Group, is understood both to have requested a government bailout of the airline and to have asked its staff to take 8 weeks of unpaid leave.
The Airlines Operators Association has called for a package of measures including suspension of business rates and regulatory costs, airlines want an APD holiday and air traffic control charges frozen, and Unite the Union has called for part nationalisation of the industry, and subsidies for certain routes.
The drop off in aviation activity has already meant a reduction in aviation pollution. Fewer planes mean less noise and a dramatic reduction in emissions. Flights departing the UK emit around 100,000 tonnes of CO2 per day, so a reduction in flights of 80% would reduce emissions by around 80,000 tonnes of CO2 for every day that measures are in place. Yet for those impacted by or particularly at risk from the virus, and for those, including airport and airline staff, facing an uncertain future and economic hardship, these are extraordinary and difficult times.
Coronavirus and the policy response: what do we want to see?
How, then, should the Government respond? The situation, in terms of how long restrictions are likely to be in place, and what the UK and other governments will do in response, is changing daily. It is right for aviation activity to be curtailed to limit the spread of coronavirus between countries. Possible financial support and possible bailouts for the industry are currently being negotiated.
Here are our thoughts so far on this:
Financial support must be targeted at workers, not airline shareholders
Many staff within the aviation industry will, along with those in many other sectors, be facing sudden loss of income and potential redundancy. The Government should keep under review what extra financial support they may need during the crisis. This should be designed as far as possible to directly benefit staff and not to bail out airline or airport businesses.
The Government should resist aviation exceptionalism
In his statement on measures to be implemented in response to the virus on 17th March Chancellor Rishi Sunak singled out aviation as likely to need a special package of support, alongside the wider offer being made to UK businesses. Aviation as an industry has long been given special treatment, including exemptions and exclusions from a raft of environmental policies and regulations over the decades. We think it’s time to think differently about this.
In terms of the sector’s economic significance or otherwise, as head of the International Energy Agency Fatih Birol has pointed out in the context of government rescue plans being drawn up around the world, “Aviation represents 1% of the global economy but it’s 8% of global oil consumption”. Passenger air travel is a service used by only half of us in any given year in the UK, and even then, most likely for leisure (over 70% of trips are for holidays). Any ‘special’ considerations should instead , surely, be focused on providing the goods and services we use and need every day. And while it is true that airlines will be hard hit by Covid-19, so too will other sectors. It’s hard to see why aviation should be given preferential support compared with, for example, hospitality, leisure or retail.
Perhaps, in fact, the Chancellor has come to a similar view. It’s being reported in the media that Rishi Sunak has written to the industry to say there would be no sector-wide rescue to prevent companies going out of business, and that further taxpayer support for the sector would only be possible once they had exhausted other options including raising money from shareholders, investors and banks.
Recovery plans should focus on building a sustainable future
Before the Coronavirus outbreak, a different crisis had started to make headlines, one with its own communities of vulnerable people, and its own threats to health and security. The impacts of Covid-19 are already proving brutal, but the climate crisis is likely both to be more complex to tackle and to have longer lasting impacts. Just before the virus hit in the UK, we had the historic court ruling that the Government’s approach to Heathrow expansion had failed to consider the Paris Agreement on climate change, and we’d started to see evidence of shifts in the public and political mood around aviation that were opening up conversations about growth, demand and the place of aviation in a zero carbon future. A government consultation on this had been imminent.
We can’t let the Government drop the ball on climate change. To quote Fatih Birol again, “This is a historic opportunity for the world to, on one hand, create packages to recover the economy, but on the other hand, to reduce dirty investments and accelerate the energy transition.” In planning short-term measures such as bailouts, guarantees and tax cuts, politicians need to stay focussed on the longer-term goals of decarbonisation and public wellbeing. Industry loans or moves for Government to buy out parts of the industry must not, for example, lock in incentives to deliver levels of aviation activity that are fundamentally unsustainable. Any financial measures that appear designed to boost aviation demand, such as the removal of Air Passenger Duty (a tax levied not on airlines but on passengers) cannot be justified, even if they apply only once flight restrictions are lifted, as argued for by the AOA.
In terms of jobs, in future, we need more people to be working on zero carbon fuels, carbon capture and storage, railways, and domestic tourism and the Government’s plans need to keep this bigger picture in mind.
What lessons can we take from people’s response to this situation? The current reality – fear, people staying isolated in their homes and avoiding contact with people outside their own family, small businesses failing and streets deserted – is a world away from the vision of personal wellbeing, and of strong and active local communities that motivates many environmental campaigners.
But perhaps there is some hope to be drawn from the fact that governments have acted quickly (if, some argue, not quickly enough) to deal with a global emergency despite economic consequences. Populations have been ready to make enormous sacrifices (alongside some examples of selfish panic buying) for the wellbeing not just of themselves and their families but of people who are more vulnerable. It’s become socially unacceptable to put other people at risk, we’re trying to work out who our neighbours are and how to be neighbourly, and people who have never taken part on online meetings are learning how they work.
How much of this will stick, and how the aviation sector in particularly is impacted in the longer term is hard to predict. We don’t yet know how far the Government will yield to the demands of the AOA to do “whatever it takes to sustain the UK aviation industry”. Some anticipate mass airline closures and bankruptcies, others argue that the industry typically recovers – and resumes its upward CO2 trajectory – faster than expected. Let’s hope that by the time the UK emerges from this horrible crisis we’ll have had the opportunity, during the slowdown in global CO2 emissions, to ourselves slow down and think about the kind of future we want, collectively, to rebuild.
The DfT has quietly published (no press release or announcement – we are in the Covid-19 crisis) a consultation about Decarbonising Transport. The end date is around June, but not specified. Shapps says: “2020 will be the year we set out the policies and plans needed to tackle transport emissions. This document marks the start of this process. It gives a clear view of where we are today and the size of emissions reduction we need.” And, less encouragingly: “We will lead the development of sustainable biofuels, hybrid and electric aircraft to lessen and remove the impact of aviation on the environment and by 2050…” (he actually believes electric planes will make much difference in a few decades??). It also says “Aviation, at present, is a relatively small contributor to domestic UK GHG emissions. Its proportional contribution is expected to increase significantly as other sectors decarbonise more quickly.” And while saying we are working with ICAO on its CORSIA carbon scheme (unlikely to be effective) the document states: “…we would be minded to include international aviation and shipping emissions in our carbon budgets if there is insufficient progress at an international level.” But overall the intention is to let demand for air travel continue to rise. . Tweet
Published 26.3.2020 (no DfT press release – it just appeared ….)
Consultation till about June – no final date has been given (as we are in the Covid-19 crisis, with no certainty about when life might return to a semblance of normality).
Shapps says in the introduction (“Ministerial Foreward”)
… just some extracts of relevance to aviation below:
“We will lead the development of sustainable biofuels, hybrid and electric aircraft to lessen and remove the impact of aviation on the environment and by 2050, zero emission ships will be commonplace globally.”
“As we move towards a net zero GHG emissions transport system, we cannot lose sight of the fact that the UK is on a journey with the rest of the world. Action is needed beyond the UK, and we are in a unique position to demonstrate real leadership domestically, as well as leading change in sectors that require global solutions, such as international shipping and aviation.”
This is the text in the section on Aviation:
Current position of the sector versus historical emissions
2.45 In 2018, UK domestic aviation (flights that take off and land in the UK) was responsible for 1.5MtCO2e of GHG emissions (53). This is a decrease of 6% since 2017, with domestic aviation contributing less than 1% of UK GHG emissions and lower than the most recent peak in 200554.
2.46 International aviation emissions, at 37MtCO2e in 201855, have more than doubled since 1990. The majority of the increase came in the 1990s and early 2000s, however emissions have also been increasing since 2012. There has been an increase of 1% since 2017 (56 – see link ).
2.47 Aviation, at present, is a relatively small contributor to domestic UK GHG emissions. Its proportional contribution is expected to increase significantly as other sectors decarbonise more quickly.
Current government aims and targets
2.48 In December 2018, the Government published the Aviation 2050 green paper that included a range of measures to achieve its 2050 ambitions at the time, including efficiency improvements in technology, operations and air traffic management, use of sustainable aviation fuels and market-based measures. The consultation closed in June 2019 and work is underway on the Aviation Strategy.
2.49 Airport expansion is a core part of boosting our global connectivity and levelling up across the UK. The Government takes seriously its commitments on the environment and the expansion of any airport must always be within the UK’s environmental obligations.
2.50 Domestic aviation emissions are included in the UK’s carbon budgets with international aviation and shipping emissions accounted for via “headroom” within our existing carbon budgets, meaning that the UK can remain on the right trajectory for net zero global greenhouse gas emissions across the whole economy. These international emissions are treated differently, largely because the inherently international nature of both sectors means that it is difficult to attribute these emissions to individual states. It is widely agreed among states that a sectoral approach (rather than state-by-state) is preferable, which is why the Kyoto Protocol gave UN International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO) responsibility for pursing measures to reduce these emissions.
Current policies in place to deliver those targets
2.51 Given their global nature and the absence of any international agreement on how to assign international aviation emissions to individual states, action at an international level is the Government’s preferred approach for addressing aviation’s international carbon emissions.
2.52 The UK is already a respected and influential member of the UN International Civil Aviation Organisation (ICAO). The UK has been instrumental in securing many important environmental agreements including the 2016 Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) agreement – the first worldwide scheme to address CO2 emissions in any single sector – and the CO2 standard.
2.53 ICAO has defined a basket of measures designed to achieve its medium-term goal of carbon neutral growth for the sector from 2020 (CNG2020). This consists of more efficient aircraft technologies as incentivised by the CO2 standard, operational improvements such as more efficient flight procedures, the development and use of sustainable alternative fuels and market-based measures like CORSIA.
2.54 Under CORSIA, qualifying aeroplane operators are required to offset the growth in international aviation CO2 emissions covered by the scheme above average 2019 and 2020 levels. At present, 82 states (including the UK) have volunteered to join CORSIA from the start in 2021, representing over 75% of international aviation activity57. From 2027 to 2035, the scheme will become mandatory, meaning that over the entire lifecycle of the scheme (2021 to 2035), it is estimated that approximately 2.5Gt of CO2 will be offset58. Since 2012, the aviation sector has been part of the EU Emissions Trading System (ETS). According to the European Commission, this has contributed to reducing Europe’s carbon footprint by more than 17MtCO2e per year59. The UK committed in its 2017 Clean Growth Strategy that its future approach would be at least as ambitious as the EU ETS and provide a smooth transition for relevant sectors
2.55 Figure 12 shows our central projection for GHG emissions from international and domestic aviation to 2050. Between 2018 and 2050 demand is projected to increase by 73%. However, emissions reductions per plane and per passenger km are driven by larger and more efficient planes, and limited uptake of low carbon sustainable aviation fuels. This results in aviation GHG emissions projections remaining broadly flat.
Figure 12: Projection of change in combined domestic and international aviation GHG emissions, passenger distance flown and gCO2/passenger km from current policy compared to 1990f60 Index (1990 = 100). GHG Passenger km GHG per passenger km
Planned future work
2.56 Later this year a consultation on net zero aviation will be published. This consultation represents the growth in government ambition since the green paper, including the 2050 net zero target and further CCC advice on international aviation and shipping, and will propose how the Government plan for aviation to play its part in delivering our net zero ambitions.
2.57 Internationally, we are committed to negotiating in ICAO for a long-term emissions reduction goal for international aviation that is consistent with the temperature goals of the Paris Agreement, ideally by ICAO’s 41st Assembly in 2022. At the 40th ICAO Assembly in October 2019, ICAO not only reaffirmed its commitment to CORSIA but crucially, prioritised work towards a long-term climate goal for international aviation.
f Historic emissions are final UK GHG statistics 60. Historic passenger kms are DfT estimates based upon CAA airports data. Aviation forecasts are produced using the DfT Aviation model. The model is an updated version of the model used for the Aviation forecasts 2017. Key updates include revised fleet mix and aircraft efficiency assumptions. In addition, a precautionary approach to airport capacity assumptions was adopted such that these represent an upper bound for carbon emissions, but the approach does not pre-judge any future planning applications or the development of policy (including following the outcome of proceedings e.g. on Heathrow expansion).
2.58 As a responsible national government, we need a contingency measure in case international progress does not go far enough or fast enough. That is why in the Government’s response to the latest CCC Progress Report, we made it clear that we would be minded to include international aviation and shipping emissions in our carbon budgets if there is insufficient progress at an international level.
. Britain hopes to:
• Lead international efforts in transport emissions reduction • Recognise aviation and maritime are international by nature and require international solutions • Harness the UK as a global centre of expertise, driving low carbon innovation and global leadership, boosting the UK economy
Within transport, road transport is the largest emitter of GHG. Cars contributed 55% of domestic transport emissions (68MtCO2e) in 2018; as figure 3 shows, absolute emissions from a number of transport sectors have decreased since 1990, but there have been noticeable increases in emissions from vans and international aviation. (b)
(The image below just has the international aviation and shipping part of a large graphic)
b International aviation and shipping emissions are accounted for via “headroom” within our existing carbon budgets. This is consistent with the Kyoto Protocol which gives two UN Organisations – the ICAO and IMO – responsibility for pursing measures to reduce these emissions. There is no agreed way of allocating emissions to different countries, so our international emissions estimate are based on bunker fuels sales for international flights and journeys.
Gatwick will close its North Terminal and consolidate operations into the South Terminal from 1 April, for a month, due to the lack of demand for air travel because of COVID-19. The runway to be in use between 1400 and 2200 for scheduled flights, but will be available for emergency landings and diversions only, outside these hours. The situation will be reviewed after a month, by 1st May. A decision on reopening the North Terminal will be taken when airline traffic eventually increases and Government public health advice – including on social distancing – is relaxed. Gatwick is hoping to make out that it is being “responsible” in closing, to protect the health of its staff and passengers, while it has been quite happy to have as many flights as it can, to and from other countries suffering high levels of Covid-19 infection, up until now. It is only closing because of the economics, and to “protect its business.” In addition London City Airport has announced that it was suspending all commercial and private flights until the end of April. It is also possible that Birmingham Airport could serve as a mortuary during the Coronavirus crisis. . Tweet
Gatwick Airport will consolidate operations into the South Terminal from 1 April and limit runway opening hours
27.3.2020 (Gatwick Press release)
Gatwick Airport will consolidate operations into the South Terminal from 1 April and limit to protect staff, passengers and the business from the impact of COVID-19
Runway to be in use between 1400 and 2200 for scheduled flights, and remains available for emergency landings and diversions only outside these hours.
Measures to be in place from 1st April for one month, with the situation kept under regular review
The severe and unparalleled impact of COVID-19 on the global aviation sector has led Gatwick to make the difficult decision to consolidate passenger processing and facilities into the airport’s South Terminal and to limit scheduled flights on its runway to between 1400 and 2200, with effect from 1 April 2020.
As a responsible business, the airport has made this decision to protect the health and safety of passengers and staff, and to shield the business following a dramatic fall in airline traffic.
The airport’s operations will be consolidated into the South Terminal and the runway will remain open for emergency landings and diversions only outside these hours.
The temporary closure of the North Terminal will last a minimum of one month and the situation will be kept under regular review. A decision taken on reopening the North Terminal when airline traffic increases and Government public health advice – including on social distancing – is relaxed.
The decision to scale back the airport’s operations has been discussed with the airport’s airline partners and any passengers booked on flights due to depart or arrive at Gatwick during this period are advised to contact their airline.
Stewart Wingate, Chief Executive, Gatwick Airport, said: “Gatwick is a resilient but also responsible business and during these extraordinary times we need to take unprecedented measures to protect the health and wellbeing of our staff and passengers, while also shielding the business from the impact of Coronavirus.
“I would also like to take this opportunity to thank my staff for their continuing hard work through this difficult time and to reassure them that we are taking these difficult decisions now, so that we are in a position to recover quickly and get back to generating jobs and economic benefits for the region and wider economy well into the future.
“During these extraordinary times, we have also seen remarkable acts of kindness and community spirit in support of people who may need some additional help. To add to this, we will also be providing some opportunities so that any of our staff, who have time during this period of reduced operations, that choose to, can help support people in our local communities.”
Gatwick Airport to scale back operations from April as demand collapses due to coronavirus
By REBECCA SPEARE-COLE (The Evening Standard)
Gatwick Airport has announced it will reduce its operations from next month as travel demand collapses due to the coronavirus pandemic.
The West Sussex hub said it will close its North Terminal – one of its two terminals – from April 1.
From then, its runway will also only open for scheduled flights between 2pm and 10pm.
The measures will be in place for a minimum of one month.
Many flights are now set to be cancelled as operations are scaled back, the airport added.
It comes as the global aviation industry suffers devastating losses while countries enforce travel bans and restrictions amid the Covid-19 outbreak.
The UK Foreign Office has issued a travel warning advising Brits to avoid all but essential travel to any country for 30 days.
The Government has also imposed strict lockdown rules for at least three weeks, like ordering Brits to self-isolate at home, and have rolled out harsh penalties for those who break them.
Gatwick’s chief executive Stewart Wingate said: “Gatwick is a resilient but also responsible business and during these extraordinary times we need to take unprecedented measures to protect the health and well-being of our staff and passengers, while also shielding the business from the impact of coronavirus.
“I would also like to take this opportunity to thank my staff for their continuing hard work through this difficult time and to reassure them that we are taking these difficult decisions now, so that we are in a position to recover quickly and get back to generating jobs and economic benefits for the region and wider economy well into the future.”
Gatwick is the UK’s second busiest airport, recording 47 million passengers last year.
Its runway will remain available for emergency landings and diversions outside the new opening hours.
Airlines have suspended the majority of their flights due to demand plummeting and countries around the world introducing travel restrictions in a bid to slow the spread of coronavirus.
London City Airport announced on Wednesday that it was suspending all commercial and private flights from that night.
Flights to and from the east London hub will be suspended from this evening until the end of April.
From next week, Southend Airport will only open on Tuesdays, Thursdays and Sundays between 4.30pm and 9.30pm.
The No 3rd Runway Coalition believe the Government has given its clearest hint yet that it will not support Heathrow expansion. In reply to a question put by Slough MP Tan Dhesi, the aviation minister, Kelly Tolhurst said that “The Court of Appeal has ruled that the designation of the Airports National Policy Statement has no legal effect unless and until this Government carries out a review”. The fresh use of the word “unless” implies consideration has been given to drop the project altogether. The DfT also state that they are focussed on responding to Covid-19 at the moment, which presents further evidence that Heathrow expansion has slipped down the agenda. The Government also say that they “are carefully considering the Court of Appeal’s judgment and will set out our next steps in due course”. However, it is unclear how long is meant by “due course”. Heathrow is struggling, with few passengers, probably having to close one or more terminals, due to restrictions on air travel for an unknown period of time, due to Covid-19. A recent review of senior staff at Heathrow shows no longer a role for overseeing expansion. Heathrow now also appear not to be pushing for the “early release” of 25,000 extra flights, as this would depend on the NPS, which has now been deemed to be invalid, by the courts. . Tweet
FRESH SIGN GOVERNMENT WON’T EXPAND HEATHROW
26.3.2020 (No 3rd Runway Coalition)
The Government has given its clearest hint yet that it will not support Heathrow expansion.
In reply to a question put by Slough MP Tan Dhesi, the Government state that “The Court of Appeal has ruled that the designation of the Airports National Policy Statement has no legal effect unless and until this Government carries out a review” (1).
The fresh use of the word “unless” implies consideration has been given to drop the project altogether.
The Department for Transport also state that they are focussed on responding to Covid-19 at the moment, which presents further evidence that Heathrow expansion has slipped down the agenda since the judgment on 27 February.
The Government say that they “are carefully considering the Court of Appeal’s judgment and will set out our next steps in due course”. However, it is unclear how long is meant by “due course” (2).
This news comes as the project has been dealt a huge blow, with the airport itself placing it under “deep freeze” and undertaking a review of the most senior roles at the airport, with no role for overseeing expansion (3).
Measures that Heathrow have taken since the Court of Appeal judgment include scrapping the proposal to bring in 25,000 more flights per year before any new runway opened (4). They described this as the “early release” of capacity of the 3rd runway (5). As the Airports National Policy Statement is now unlawful, Heathrow cannot seek permission for the release of the extra flights.
If Heathrow were to bring a fresh application forward for these additional 25,000 flights, it would be decided by the local authority – Hillingdon Council – who was one of the claimants in the legal challenge and are against any expansion of Heathrow.
Other measure include:
Entire expansion project put on hold, into a “deep freeze” No fresh consultation on airport’s Masterplan Shareholders want costs controlled given new political risk of the project
Paul McGuinness, Chair of the No 3rd Runway Coalition, said:
“In light of all circumstances, it seems right that the Government is unenthusiastic about resuscitating the Airports National Policy Statement. For as well as being ruled unlawful by the courts, it has become increasingly clear that the full facts about the deleterious air quality, noise, carbon and regional consequences of Heathrow expansion had not been presented to MPs, when it was subjected to parliamentary scrutiny. And even Heathrow’s investors are now expressing cold feet about the project.
Moreover, it’s most welcome that Heathrow has now announced that it won’t proceed with its other plan, for an 25,000 extra flights in advance of a third runway – the prospect of which had been causing such alarm in the airport’s hinterlands. Because our communities are not only saying “No” no a third runway at Heathrow, but “No” to any expansion of flight volumes from what is, statistically, already the world’s most disruptive airport”.
Parliamentary Questions, number 32187, Written Answers, 24 March 2020 https://members.parliament.uk/member/4638/writtenquestions#expand-1186505
2. Parliamentary Questions, number 32188, Written Answers, 24 March 2020 https://members.parliament.uk/member/4638/writtenquestions#expand-1186505
3. John Holland-Kaye, blog to Heathrow staff, 17 March 2020. For full blog, please get in touch.
4. Email sent to members of Board of Airlines Representatives in the UK, 3 March 2020. For more info, please get in touch.
5. BACKGROUND INFO: Currently, Heathrow can’t land two planes on parallel runways at the same time. In order to allow a plane to land on the ‘wrong’ runway, the gap between planes landing on the other runway has to be extended. The introduction of Independent Parallel Approaches (IPA) is an attempt to get around this. The granting of an additional 25,000 flights would have required planning permission from the Planning Inspectorate in order to lift the 480,000 Air Traffic Movement Cap imposed in the Terminal 5 Inquiry. The introduction of IPA would also have required approval for the airspace changes from the CAA. It is not possible to add the 25,000 extra flights without introducing IPA as there is not the flexibility within current landing procedures to land that many extra planes safely on a 2-runway airport.
For more information, contact:
Rob Barnstone on 07806947050 or firstname.lastname@example.org
Rishi Sunak, the chancellor, has written to the airlines and airports, warning that there would be no sector-wide rescue to prevent companies going out of business because of coronavirus. He insisted that further taxpayer support for the sector would only be possible once they had “exhausted other options” including raising money from shareholders, investors and banks. Companies have been told to access funding already announced last week, including monthly payments of up to £2,500 for every employee temporarily laid off because of the crisis. In his letter he said that airlines and airports could only seek “bespoke” support from the Treasury as a “last resort”, with no guarantee of further help. The comments follow criticism levelled at Easyjet after it paid shareholders £174 million in dividends last week, despite appealing for taxpayer support. Sir Richard Branson, has also been attacked after the airline told staff to take 8 weeks of unpaid leave. He has since promised to invest £215 million to support his Virgin Group business. Many airlines may go bankrupt due to the virus crisis. Some of the smaller airports may close, and larger airports partly close temporarily. . Tweet
Don’t expect us to bail you out, Rishi Sunak tells airlines
By Graeme Paton, Transport Correspondent
Ben Clatworthy, Assistant Travel Editor | Charlotte Wace
Tuesday March 24 2020 (The Times)
Airports may have to close temporarily after the government ruled out a comprehensive state bailout for the aviation industry, ministers were told today.
Rishi Sunak, the chancellor, wrote to the airlines and airports this afternoon, warning that there would be no sector-wide rescue to prevent companies going out of business because of coronavirus.
In a letter seen by The Times, Mr Sunak insisted that the aviation industry was “vital” to the nation’s economic recovery and to rescue Britons stuck overseas.
However, he said that further taxpayer support for the sector would only be possible once they had “exhausted other options” including raising money from shareholders, investors and banks. Companies have been told to access funding already announced last week, including monthly payments of up to £2,500 for every employee temporarily laid off because of the crisis.
In his letter he said that airlines and airports could only seek “bespoke” support from the Treasury as a “last resort”, with no guarantee of further help.
The comments follow criticism levelled at Easyjet after it paid shareholders £174 million in dividends last week, despite appealing for taxpayer support.
Sir Richard Branson, the billionaire owner of Virgin Atlantic, has also been attacked after the airline told staff to take eight weeks of unpaid leave. He has since promised to invest £215 million to support his Virgin Group business.
It is believed that the lack of a deal may also be linked to significant disparities between individual airlines and the fact that many are foreign owned. International Airlines Group – parent company of British Airways – is registered in Spain and its biggest shareholder is Qatar Airways.
Hundreds of thousands of British holidaymakers face being trapped overseas as airlines have begun grounding their fleets.
Ryanair confirmed that it expected that most of its flights would now be cancelled until the end of May as growing number of countries imposed lockdowns and restricted the movement of people. It would maintain a “very small number of flights to maintain essential connectivity, mostly between the UK and Ireland”. However, the chancellor’s comments dismayed industry leaders, who accused the government of performing a U-turn on funding for the sector a week after the chancellor floated the suggestion of targeted financial cash to help keep planes in the skies.
The International Air Transport Association (Iata) warned that airlines in Europe would be worst hit by the global decline in travel prompted by the coronavirus pandemic. It said that European airlines were expecting an average 46 per cent drop in income this year compared with 2019.
The Airport Operators Association (AOA) said that passenger numbers at some UK airports were “approaching close to zero” and a number were already considering “shutting down for a period of time” after a collapse in income.
Airports are maintaining operations as hubs for air freight, bases for search-and-rescue operations and to provide links to the offshore oil and gas industry.
However, Karen Dee, the AOA chief executive, said that “all of that is now put at risk by the government’s decision”.
She added: “While countries across Europe have recognised the vital role airports play and are stepping into the breach, the UK government’s decision to take a case-by-case approach with dozens of UK airports is simply not feasible to provide the support necessary in the coming days.
“Not only does the decision today leave airports struggling to provide critical services, it will hamper the UK recovery . . . We urge the government to reconsider and at the very least provide a comprehensive package of support for airports and ground-based services, to ensure the UK’s critical aviation infrastructure is ready to take off once the Covid-19 pandemic recedes.”
The chancellor’s letter to airports and airlines said that the “priority for all companies should now be to reassess their cashflow positions in light of last Friday’s announcement” of support for all sectors of the economy.
Mr Sunak wrote: “Given the significant importance of the aviation sector to our economy and economic recovery, the government is prepared to enter negotiations with individual companies seeking bespoke support as a last resort, having exhausted other options. However, further taxpayer support would only be possible if all commercial avenues have been fully explored, including raising further capital from existing investors and discussing arrangements with financial stakeholders.
“Terms would be structured to protect taxpayer interest, and the government would expect to have regard to factors including but not limited to whether the business makes a material contribution to the economic activity of the UK.”
Any shutdown of airports is likely to jeopardise the mission to repatriate Britons from destinations around the world.
On Monday Dominic Raab, the foreign secretary, ordered British citizens overseas to return immediately amid fears most commercial air travel would cease. It remains unclear exactly how many Britons are overseas, although the government has said the number could be anywhere from 300,000 to a million.
Coronavirus: No extra help for airlines, chancellor says
The UK chancellor has told airlines to find other forms of funding and not turn first to the government for help getting through the coronavirus crisis.
Demand for tickets has collapsed forcing companies to ground aircraft.
Aviation bosses have been lobbying the government for a targeted aid package to stop firms going under as a result of the slump in demand.
But in a letter on Tuesday Rishi Sunak said the government would only step in as “a last resort”.
Mr Sunak instead urged airlines to try and raise money from shareholders.
He said the government would only enter into negotiations with individual airlines once they had “exhausted other options”.
But industry group the International Air Transport Association (IATA) warned of an “apocalypse” in the aviation sector as it called on governments around the world for help. The group said annual worldwide revenues from ticket sales would fall by $252bn (£215bn) if travel bans remain in place for three months, a drop of 44% compared to last year.
“Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business,” IATA boss Alexandre de Juniac, said.
“There is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry.”
Virgin Atlantic, Ryanair and EasyJet have all grounded most of their fleets, while BA-owner IAG has cut capacity by 75% and Norwegian Air has cancelled thousands of flights.
This has also affected airports, which have cut hundreds of jobs across the UK since coronavirus arrived in the country.
Karen Dee, who runs the Airport Operators Association (AOA), said the aviation industry was “surprised” by Mr Sunak’s decision and will have to “fight on its own to protect its workforce and its future”.
“While countries across Europe have recognised the vital role airports play and are stepping into the breach, the UK government’s decision to take a case-by-case approach with dozens of UK airports is simply not feasible to provide the support necessary in the coming days,” she said.
“Not only does the decision today leave airports struggling to provide critical services, it will hamper the UK recovery.”
The chancellor’s stance can be considered a U-turn since he seemed only last week to be ready to regard aviation as a special case. But a lot can happen in a few days and, in the interim, Sunak unveiled his flagship “furlough” scheme to keep workers in jobs by paying 80% of wages, up to £2,500 a month. That’s a huge help for all service industries, airlines included. It ought to be enough for now.
It will also have dawned on the Treasury that major UK operators can withstand a fair amount of temporary financial pain. EasyJet and IAG, owner of British Airways, have boasted about the size of their cash balances and the depth of their credit facilities. Fine, let them use those resources.
Indeed, easyJet gave a perfectly-timed illustration of its riches when it distributed a £171m dividend to its shareholders, including £60m for founder Sir Stelios Haji-Ioannou in Monaco, last week. Those same investors are free to recapitalise their airline should the need arise.
IAG and easyJet, thankfully, seemed to have absorbed the message and are not asking for bespoke deals or bail-outs. Instead, the difficulty for Sunak will come when he’s presented with pleas from weaker airlines and regional airports.
He can only promise pragmatism. It would be hard, for example, to mount an argument for saving a weak airline that couldn’t make profits in the pre-coronavirus age. There would, though, be a decent case for saving regional airports to boost economic recovery, as long as terms were good for taxpayers. But that’s getting ahead of events. In the meantime, the simple message is correct: shareholders and owners need to look out for their own interests.