UK air travel – Facing the future
Tim Alderslade joined Airlines UK, the trade body for UK-registered airlines, as Chief Executive in May 2016 from the Airport Operators Association (AOA) where he was Public Affairs and PR Director. Previously he worked for two MPs and for the Insight Consulting Group. Over the last few months he has become familiar and articulate voice for the industry.
In early February – which feels an eternity ago – the UK’s aviation sector was celebrating a key milestone as it committed to achieving net zero carbon emissions by 2050. Our biggest challenge was how to make sure that steady, continuing passenger growth was compatible with the UK’s climate objectives.
We did not know at the time, but the world had already changed. Just a week before the announcement, the first UK cases of Covid-19 were confirmed in York. No-one could have imagined the human tragedy about to unfold, or the economic catastrophe that would hit the UK’s aviation and tourism sectors.
The damage caused by the pandemic on aviation is of an entirely different scale to even the Financial Crisis of 2008, or 9/11 before that. As the virus swept into Europe, demand for flying collapsed, even before travel and border restrictions were put into place. For carriers like Flybe the hit on demand was the last straw that led to failure, a personal tragedy for affected staff but also a major hit to the UK’s domestic connectivity and the many regional airports that relied upon its business.
The latest data from the International Air Transport Association (IATA) paints a devastating picture. Airlines are expected to endure multi-billion pound losses this year, and into next year, as demand gradually returns on the assumption that the virus wanes. But demand might not return to where it was for several years. This is the backdrop to the painful job losses announced by all parts of the aviation sector, as it looks ahead to where demand is likely to be in the short to medium term.
This impact was recognised by the Chancellor early on in the crisis, who spoke of a dedicated support package for aviation. This, to date, has not materialised. Instead, airlines have had to make use of the wider economic support measures on offer, like the job retention scheme. Undoubtedly these measures have helped stave off collapse, and have saved many thousands of jobs in the sector. But make no mistake, this support does not make up for the losses being incurred daily by airlines still paying to maintain aircraft without passenger revenues.
The UK’s blanket quarantine announced in early June was an irrational, hugely damaging policy which, for as long as it remained in place, prevented any kind of aviation recovery and put even more jobs at risk. Its replacement with list of travel corridors announced on Friday, removing the need for quarantine from ‘low risk’ countries and allowing airlines to salvage some of the critical summer tourism season, is an essential and welcome move – but it can only be the start.
If the UK truly wants to retain a world-beating airline and wider aviation industry, and the hundreds of thousands of jobs that depend on them, then Government needs to step up with further support to bridge the sector over what is going to be a hugely challenging winter season and 2021, when demand will remain weak.
What is needed is the same kind of creative, bold thinking that has underpinned much of the economic response to Covid-19 to date. For aviation, top of the list is a 12-month waiver of Air Passenger Duty. UK APD is far higher than equivalent taxes almost anywhere in the world, and will be a drag on demand and connectivity as people look to return to the skies. We also need a further extension of the furlough scheme for aviation, short term relief from various regulatory and navigation charges, and an extension to changes to airport ‘use them or lose them’ slots rules for the winter season to prevent airlines from having to fly empty planes just to retain their slot privileges. And critically, the Government has an opportunity to put the sector on a truly sustainable footing by investing in the emerging sustainable aviation fuels sector – a technology that is around 75% less carbon intensive than traditional jet fuel – as a driver of economic recovery, generating thousands of new UK jobs in fuel plants across the country over the next decade.
UK aviation is dynamic, and resilient, but has never faced a test like this before. With the right support now, we can emerge stronger on the other side."
Tim Alderslade, Chief Executive, Airlines UK