Airport News
Below are news items relating to specific airports
Gatwick: Likely to take 4 years for passenger levels to recover to 2019 levels (if ever …)
Gatwick has said it will not ask the Treasury for emergency loans despite fearing that passenger numbers will not return to pre-Covid levels for up to 4 years. Gatwick has already secured a £300m loan from existing banks. It has also cancelled dividends, cut a lot of costs and furloughed around 2,000 staff. Boss Stewart Wingate said: “We think it is probably going to take somewhere between 3 and 4 years to get back to the levels that we were at in 2019." Gatwick hopes it can ride out months of losses, but want to have flights re-starting by the end of May. Unlike rivals, Gatwick said "you should do absolutely everything you possibly can that is within your control to protect the business" before asking for state aid. Gatwick is open from 2-10pm each day, for a handful of flights. Unlike rival Heathrow, which gave out over £100 million in dividends to shareholders in February, Gatwick’s owners will not be taking a dividend despite the airport announcing an 8% rise in earnings of £432m in the 9 months to December 2019. There may not be dividends till 2022. It is possible that British Airways might leave Gatwick in due course.
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Smaller airports, whose finances were already dodgy before Covid-19, may not survive post-pandemic
Due to Covid-19, about 90% of flights have ceased. Some airports are "at risk" of closure because of the loss of business. Airports said cargo flights were running and shareholders were being supportive as they worked to cut costs. Flight tracking website Flightradar24 recorded just 711 departures from the UK's 10 biggest airports last week - compared to 7,865 in the week up to the UK's lockdown. Even before Covid, many regional airports were precarious, and that was made worse by the collapse of Flybe for domestic and short haul flights. They would normally make money from the Easter holidays and the summer. Even if there is a gradual lifting of lockdown, and more people start to fly, this is unlikely to create the usual summer rush. If the end of lockdown happens towards winter, that is a time of less air travel. Some grounded planes may never fly again. Fear of infection may never be forgotten. People's attitudes to travel may have been permanently altered. So some airports may to out of business. What would take over their land and buildings? Furloughed staff are being paid 80% of their wages by the government, but the sector wants more public money. Will it only be the larger airports that can survive longer-term?
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Coronavirus: Areas reliant on aviation industry ‘to suffer worst’ – especially Crawley, too dependent on Gatwick
The Think Tank, the Centre of Cities, believes jobs in cities and towns which depend on the aviation industry will be most under threat by the coronavirus crisis. They estimate about 20% of jobs in these areas are vulnerable to the economic impacts of Covid-19. The economy of Crawley is likely to be hardest hit, as it is too dependent on Gatwick. More than 53,000 jobs are classed as vulnerable and very vulnerable in Crawley, of about 94,000 in the area. About 18% of jobs in Crawley are in aviation, compared with 1% on average across other big towns and cities. There are a lot of taxi drivers, whose work depends on the airport. People have warned for years about the dangers of areas "having all their eggs in one basket" on jobs, with too high a dependence on one industry. As much of the UK airline sector has almost closed down, with at least a 75% cut in flights at Heathrow, and over 90% cut at Gatwick, almost no flights using Luton, and so on. Luton is another town that is overly dependent on the airport, and now suffering. Also Derby and Aberdeen. The areas worse affected by job losses due to Covid-19 will be asking for government help, once the lockdowns are lifted.
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GMB call on Heathrow to reverse “kick in the teeth” reneging on paying London Living wage from April 2020
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.
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Karl Turner asks: Where next for the UK’s airport policy?
On 27th 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. So unless Heathrow succeeds in appealing to the Supreme Court, or Shapps amends the ANPS, Heathrow expansion is unlikely to happen. Expansion at Heathrow would have had a negative impact on the regions of the UK. The forthcoming Aviation White Paper [Aviation Strategy] provides the opportunity for Government to have a rethink about its entire aviation policy, particularly with regard to any future airport expansion. At the very most, UK aviation could expand by 25% on its 2018 level. But the current government projections are for 73% expansion by 2050, with various entirely speculative technologies that do not exist, or would be prohibitively expensive, removing the carbon. Alternative fuels are not going to happen on any scale. The government must avoid financial measures that boost aviation demand or support failing airline businesses, which cannot be justified in light of the climate crisis. .
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Gatwick Airport will consolidate operations into the South Terminal from 1 April and limit runway opening hours
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.
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Fresh indication that the government is not intending to support Heathrow expansion
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.
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Chancellor tells airlines that the government will not bail them out, due to Covid-19 crisis
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.
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Heathrow expansion frozen, with Coronavirus crisis adding further costs, uncertainties and delay
Heathrow contractors have been told to down tools, with work put 'on hold' until there is further clarity on any plan for a 3rd runway. It is unlikely to make any progress during the Covid-19 recession, when the number of people flying has been cut to just tiny numbers, and the situation likely to last for at least several months. This comes after the Court of Appeal ruling (27th February) that the Airports NPS is illegal; Heathrow is trying to appeal against this, to the Supreme Court, with a decision on whether to allow the appeal by mid April. Now the delays to the runway plans, if it ever happens, have increased by perhaps another year - due to the Coronavirus. The date when it might be ready has slipped from 2026, to 2029 (due to the CAA decision) to about 2030 (due to the Appeal Court) to about 2031 (due to Coronavirus).... so it is looking less and less likely. The airport will lose huge amounts of money, due to the virus, unless government bails it out - and that is widely NOT seen as a sensible use of government funds, when millions of people also need financial help, due to Covid-19.
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Airlines write to ask for government help as passengers no longer travel by air, due to Covid-19
As with so many other sectors and businesses in the UK and elsewhere, the Covid-19 pandemic is causing great difficulties to airports and airlines. Having speeded the spread of the disease round the world, airlines are now seeing a massive reduction in the numbers of people who want to fly. Governments are telling people not to travel. Planes are empty. Airports are empty. Many airlines do not have more than 2 or 3 months of reserves and are asking for government money to bail them out. Airports want help too, as do most other sectors. Whether giving money to airports (eg. Heathrow and Gatwick, owned by rich foreign companies) is a sensible use of scarce public funds, is another matter. Now 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 virus crisis (that might last for many months more). The Airport Operators Association (AOA) said other airports are in the same position. IATA has said only about 30 of more than 700 airlines operating commercial flights around the world were likely to survive the next few months without help.