The Airport Operators Association (AOA) has warned that UK airports could shut down ‘within weeks’ without urgent government intervention as the Covid-19 crisis escalates.
And, although welcoming the chancellor’s announcement of a series of measures to support businesses through the pandemic, the AOA wants the government to be as bold in supporting the aviation industry as the measures announced so far to help the retail and hospitality sectors.
Karen Dee, AOA chief executive, said: “The chancellor’s unambiguous statement of support for UK businesses is welcome and measures such as the unlimited loans to support businesses manage cashflows provide reassurance. However, with passenger numbers declining rapidly in recent days, airports want to hear the details of the specific support package for the aviation industry as soon as possible.
“We urge the chancellor to be as bold in this aviation support package as he was on some of the measures announced today to ensure airports can reassure staff and passengers that they will be there to provide the connectivity the UK needs after the COVID-19 pandemic has receded.”
The AOA had previously urged the UK government to catch-up to its peers across the continent and provide support to the sector and the wider economy through financing, guarantees, grants and tax relief.
Dee said: “Governments across the world are supporting their national aviation industries, as many parts of the global travel industry have come to a halt. As some airlines call on the UK government to act similarly, we are clear that airports will shut down in weeks unless urgent action is taken to support the industry.
“The UK’s airports are critical national infrastructure, fulfilling a vital public service, and are on the frontline of the COVID-19 outbreak. It is essential that airport businesses remain operating and are able to weather this storm, so that they can provide the connectivity which drives growth, employment and prosperity after the crisis has abated.
“With travel bans proliferating and passengers being unwilling to fly, traffic through airports has plummeted. UK airports are taking immediate and drastic action to cut costs and are scaling back investments in light of the situation. Due to the fixed costs of operating airports, the government will need to provide additional support.
“The government must step in to see airports across the four home nations through the current crisis, and make an unequivocal commitment to doing whatever it takes to sustain the UK aviation industry.”
The AOA says the government should also immediately:
- Be prepared to provide/organise emergency financing as a measure of last resort;
- Require banks to temporarily not enforce financial performance-based banking covenants;
- Suspend business rates and other government and local government rates and taxes on airports;
- Deferral of payments of all VAT, corporation tax and other taxes for the duration of global flight restrictions;
- Share the employment cost of airport staff laid off throughout the crisis;
- Suspend regulatory costs on airports where possible;
- Indefinitely postpone major increases to those regulatory costs, such as the Next Generation Security Checkpoint;
- Provide relief from airport policing costs.
“For the sake of the UK economy it is essential for the UK government to catch-up to its peers across the continent and provide support to the sector and the wider economy through financing, guarantees, grants and tax relief. Finally, to help kickstart aviation again once the pandemic is retreating, the government should suspend Air Passenger Duty for six months,” said Dee.