UK’s airports losing £83 million a week as a result of COVID-19
Wednesday 21st October 2020
The COVID-19 crisis has brought international aviation to a near-standstill, in the worst drop-off in traffic levels the industry has ever witnessed. Today, the Airport Operators Association (AOA) has released the result of an assessments of members’ financial position that shows that they are currently losing £83 million a week.
These figures cover the airports only and there will undoubtedly be a multiplier effect on the businesses and wider communities around UK airport sites. Such losses undermine the ability of airport businesses to power the future prosperity of their local economies, forgoing crucial investment projects and, unfortunately, leading to job losses. Britain needs our airports to stay open to preserve our connectivity with the rest of the world, but right now it is the operators that are bearing the costs.
The Government has claimed that it has provided £8.5bn of support for aviation (see Notes to Editors for reference) , but in reality this is made up of the economy-wide measures such as the Job Retention Scheme that are now being withdrawn, and support for the aerospace (a manufacturing industry), rather than measures targeted at supporting UK airports and aviation specifically.
In order to help protect jobs and support the sector through this unprecedented crisis, the AOA and its member airports have consistently called for a package of financial support measures:
- Relief from Business Rates payments for 2020-2021 in line with the relief granted to the hospitality and retail sectors, aiding companies’ cashflow (Such support has been given to airports in Scotland and Northern Ireland)
- Suspend Air Passenger Duty (APD) for 12 months to maintain viability of routes still flying and to stimulate increased airline activity
- Fund the aviation sector’s regulator, the Civil Aviation Authority, for the 2020/2021 charging period.
- Continuation of VAT-free sales airside
- Assistance with police costs reflecting its fixed nature despite reduced passenger numbers
- A longer-term package of financial support that promotes, protects and enhances the UK’s global connectivity
The urgent introduction of a robust testing system following the creation of the Global Travel Taskforce is also vital, but testing on its own will be insufficient to ensure the viability of the whole sector – financial support will still be necessary.
Chief Executive of the Airport Operators Association Karen Dee said:
“UK airports have done everything in their power to weather the storm and have done so without the specific Government support afforded to other sectors. That they are losing £83 million per week must serve as a wakeup call to the Government and lead to the delivery of the promised Aviation Recovery Package of support.
“As we approach the challenging winter months the Government must support the industry through the introduction of business rates relief for airports in England and Wales, continuation of VAT-free sales airside, funding for the CAA, a temporary suspension of APD and a longer-term package of financial support that promotes, protects and enhances our global connectivity as our sector looks towards the long journey to recovery.
“Damage now to Britain’s connectivity will take years to repair, harming all our ambitions for the UK in the global marketplace.
“Last week’s commitment to testing was a welcome first step, but we need the Government to understand the brutal reality facing UK airports. These projections show that the time for deliberation has passed, and it is essential that they deliver this support and deliver it now.”
Notes to Editors:
The Government has broken down its claim of £8.5bn support for the aviation industry as follows in a parliamentary answer by Nadhim Zahawi MP, the Parliamentary Under-Secretary at Department for Business, Energy and Industrial Strategy, on 21September:
“The amount is made up of support across the Covid Credit Financing Facility (£2.7 billion), expected UK Export Finance support for aerospace and its aviation customers (£5.5 billion) and R&D support for aerospace (across 3 years over £500 million).”