Below are links to stories of general interest in relation to aviation and airports.
AEF asks: how should policymakers react to Covid-19 problems for aviation, and plan for the sector’s future?
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.
DfT consultation on “Decarbonising Transport” – nothing of substance to cut aviation CO2
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.
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.
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.
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.
Glut of jet fuel, as aviation demand is hugely reduced – land storage facilities nearly full – now storage in tankers at sea
The world is close to running out of space to store jet fuel that planes do not need, due to the collapse in air travel because of Covid-19 virus. Only about 20% of land-based storage for the product remains -- about 50 million barrels. There is now a shortage of places to keep unwanted jet fuel supplies. Unless oil refineries stop producing jet fuel, this will get worse. The aviation industry normally uses about 7 million barrels of jet fuel per day. Demand is down by about a third now, and could fall by 50% in the next few months. Airlines might be able to store fuel cheaply (perhaps $75 per tonne for two months) and save themselves money in future. It is unclear how much oil refineries have cut production. While land based sites may fill up, tanker ships can be chartered to store jet fuel at sea. However, there is a limit how long it can be stored, due to concerns about oxidation, stability and moisture content, and it degrades much faster than crude oil. Global oil consumption is being reduced by the coronavirus; as well as less air travel, many people are driving less. Refineries may switch to producing more diesel.
UK government draws up plans to buy airline shares, that would eventually be sold back to private investors, to keep them afloat during Covid-19
The FT has reported that the UK government is preparing plans to buy equity stakes in airlines and other companies hardest hit by the coronavirus crisis, after being warned that the economic packages it has announced so far will not be enough to save them. This is still in discussion. The plans would see the UK taxpayer inject billions of pounds into companies including British Airways in exchange for shares that would eventually be sold back to private investors. The airlines, unlike companies selling essential items, currently have almost zero customers - taking holidays and leisure breaks is no longer desirable, or indeed, permitted. So the airlines and airport will have almost no income. The government plan for the airlines is "an infusion of capital in exchange for equity.” That is safer for the government than a loan, that may never be repaid, even when airlines get back to operating nearly normally. Many airlines already have huge debts. They cannot borrow more commercially. Some airlines wanted state loans and tax relief, but that might not be enough during a sustained shutdown in the global aviation industry. The US might also take equity stakes in their domestic airlines.
Fatih Birol, of IEA, says due to Covid-19 Governments have ‘historic opportunity’ to accelerate clean energy transition
International Energy Agency (IEA) head Fatih Birol is calling on heads of state and international financial institutions to make Coronavirus recovery plans sustainable. He says political and financial leaders have “a historic opportunity” to usher in a new era for global climate action with economic stimulus packages. These stimulus packages are a critical opportunity for governments to “shape policies” in line with climate action. This is a great opportunity to focus, instead of on fossil fuels, on clean energy technologies and accelerating the transition away from fossil fuels. Currently huge sums are spent on keeping the price of fossil fuels low. Instead, now is a unique historic opportunity. This includes the aviation sector, which represents 1% of the global economy but 8% of global oil consumption. When plans to reinvigorate economies get going, they must address climate breakdown; including financial stimuli using low interest rates for low carbon electricity is key - and funding carbon capture and storage technologies. Governments need to increase the production of climate-proof jobs, avoiding jobs in "stranded asset" fossil fuel industries.
Role of ICAO in not encouraging rapid decrease in international spread of Covid-19 by air travel
In the Covid-19 international virus crisis, the airline industry has been they key means by which the virus has spread rapidly, to almost every country. But the industry has been primarily concerned with its own economic interests. There is much more the aviation industry could have done, earlier on, to limit the spread of the disease. The Canadian news website, Ricochet, says only by the 9th March did ICAO's council finally adopted a declaration affirming “the urgent need to reduce the public health risk of the spread of COVID-19 by air transport,” but the damage was already done. Instead of limiting flights as much as possible from the start of the COVID-19 epidemic, ICAO lobbied to delay the adoption of health measures that could harm air traffic. They stressed the role of governments in directing the health checks etc on travellers, avoiding discouraging air travel by those who were likely to have been in contact with infected people. Doing that would have reduced passengers, and thus income and profits for the sector. On Feb 4th ICAO warned governments about imposing “additional health measures that may significantly impede international [air] traffic.” By then the first cases of infection had already been declared two to three weeks earlier in travellers who came from China, most of them by plane.
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.