Aviation Recovery Plan
The Covid-19 pandemic has had a devastating impact on the UK’s aviation, travel and tourism sectors
It is essential that the Government and industry works together to implement a full recovery plan that protects jobs and supports businesses currently at risk. The impacts of failing to support these sectors will not just be felt in the sector but will reverberate across the economy. With that in mind, in August, The Future of Aviation Group put together a ten-point ‘Aviation Recovery Plan’ to support the aviation, travel, and tourism industries. We urge the Government to introduce vital measures below, in order to protect the jobs, businesses and kickstart the recovery for some of the UK’s world leading industries.
Point 1: Introduce Covid-19 Testing
· Covid-19 testing should form part of a more nuanced approach to air travel that, ensures passenger safety, enables international trade, and supports the recovery of the aviation sector.
· “Test-on-Arrival” is already being used by over 30 countries and half the world’s busiest airports as a safe and effective alternative to quarantine.
· As well as limiting leisure travel, without testing we risk damaging our aspirations for a ‘global Britain’, with many of our key trading partners currently subject to the fourteen-day quarantine.
· Testing is supported by many in the industry and Heathrow Airport are currently waiting for Government approval to start a trial.
Point 2: Introduce Regional Travel Corridors
· A more nuanced approach must also include regional travel corridors that allow travel to regions, states and islands which have lower Covid-19 rates.
· This will help to significantly drive consumer demand at the most at risk regional airports, which are particularly reliant on flights to European holiday islands. Many European islands continue to attract visitors through the autumn so there is an urgent need to open up these routes before they are completely lost until Spring 2021.
· Regional travel corridors are also vital in opening up important trading routes with key partners such as the USA.
Point 3: An Employment Support Package to March 2021
· Our aviation, travel and tourism industries support over 4 million jobs throughout the UK.
· Around 44,000 airline employees have been furloughed during the Covid-19 disruption and it is estimated that 110,000 airport or airport related jobs are at risk without further support.
· In total, IATA forecast that as many as 780,000 jobs are at risk across the aviation, travel and tourism sector.
· With these sectors expected to take significantly longer to recover than others, it is vital that the coronavirus job retention scheme is extended on a sector specific basis until March 2021, in line with countries such as Germany, Australia and Austria, to prevent widespread job losses.
Point 4: Take Action on Business Rates
· Unlike in Scotland and Northern Ireland, airports in England and Wales have not received any support on business rates despite the near total collapse in passenger numbers.
· Airports in England paid £70 million in business rates between March and June, when national passenger numbers fell by 97%.
· Airports should be given the same level of support as other sectors and receive backdated support and a 12-month deferral on business rates until September 2021. Tour operators and destination management companies also need to receive business rates support in line with our proposal for airports.
· Travel agents should continue to receive business rates relief until at least September 2021.
· The Government must also commit to reviewing business rates for the sector and only re-introduce them when the industry has begun to recover.
Point 5: Temporary Suspension of Air Passenger Duty
· Existing levels of APD risk restricting the UK’s economic recovery and international competitiveness, and risk damaging trade and business.
· According to research commissioned by Airlines UK, suspending APD until the conclusion of summer season of 2021, would:
- Save 45% of the air routes out of the UK that would otherwise be lost due to the impacts of the Covid-19 pandemic
- Add an additional £7 billion in GVA, more than three times the expected APD take for the next twelve months
- Help to protect up to 10,000 jobs
· We also believe that the Government should conduct a full review of APD, work with industry on a long term solution to aviation taxation, and consider the abolition of double taxation of domestic flights in the UK.
Point 6: Support the Green Recovery
· Although challenging for the sector, the Covid-19 pandemic provides an opportunity to rebuild the sector in a way that helps deliver the Government’s green revolution ambitions.
· The creation of the net zero council was a welcome first step, but we must also see the Government:
- Commit £500m in funding, matched by industry, to support the delivery of sustainable aviation fuel production facilities in the UK, which by 2035 SAF production could generate up to £2.7 billion for the economy and support around 18,800 jobs across the UK.
- Increase funding for the Aerospace Technology Institute to enable the UK to become a world-leader in developing more efficient engines as well as hybrid and electric aircraft.
Point 7: Support for UK Travel Inbound Tourism
· Last year inbound tourism generated £28.4 billion in export earnings for the UK economy and employed an estimated 450,000 people in hotels, restaurants, transport providers and attractions.
· Our inbound tourism industry is entirely dependent on international visitors and inbound tour operators and destination management companies, who are responsible for bringing in and looking after millions of international visitors to the UK every year, have had almost no business since the beginning of the Covid-19 pandemic.
· These businesses are vital to our visitor economy but research by UKinbound suggests over half of these businesses are fighting for survival over the next six months. The sector would benefit from the recovery of the aviation sector but also:
- MHCLG guidance on rate relief and grants should be amended to include tour operators and destination management companies
- Financial support to promote the UK as a destination when circumstances allow
- Automatic extensions to visas not used by international travellers due to the pandemic
- Support for SME businesses, based on the previous grant-funding made available to Retail, Hospitality and Leisure businesses, as well as other measures, such as business rates relief, into the financial year 2021/22.
Point 8: Absorption of CAA/NATS Charges for 2020/21
· The Government must build on the announcement that it will join other European nations in deferring air navigation charges by meeting other costs for 2020/21 including Civil Aviation Authority (CAA) and NATS (air traffic control) charges.
Point 9: Airspace Modernisation
· Before the pandemic, airspace modernisation was a key priority for the industry and for Government, and it is essential that this remains a priority.
· Modernising our airspace will have long term economic and environmental benefits such as potentially reducing future CO2 emissions by up to 20% by 2050. The Government is rightly committed to 'building back better' and modernising our airspace must be a key part of that commitment.
Point 10: Bring Forward Public Procurement and Accelerate Public Investment
· The dramatic decrease in air travel has had a substantial impact on the aerospace manufacturing industry.
· In May 2020, aircraft deliveries were down 75% on May 2019 which is going to have a significant long-term impact on the sector.
· To kickstart the UK aerospace manufacturing industry and alleviate cash flow issues, the government should bring forward any plans for government spending on aerospace .
· Government should also bring forward surface access infrastructure improvements to support improved access to airports, and but also create jobs in the construction industry as a consequence of these projects.