Coronavirus: Government accused of U-turn on support for aviation

The Airport Operators Association (AOA) has accused the government of a U-turn over support for the aviation sector during the coronavirus crisis.

Last week, the chancellor Rishi Sunak and transport secretary Grant Shapps were in talks about a specific package to help airlines and airports.

But a letter from the chancellor to the aviation sector today says the government is prepared to “enter negotiations with individual companies seeking bespoke support as a last resort, having exhausted other options”.

The letter outlines the government’s other measures to support businesses, such as grants for keeping staff on the payroll and deferred VAT payments.

Karen Dee, chief executive of the Airport Operators Association, said: “After having publicly announced a support package for airports and airlines, we’re surprised by where we find ourselves today. Our industry will now have to fight on its own to protect its workforce and its future.

“With passenger numbers approaching close to zero, UK airports have seen a major drop in revenue.

“They are taking unprecedented steps to safeguard airport staff and operations through this crisis, which could include in some cases considering shutting down for a period of time.

“This could have major impacts for UK communities and businesses.

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“Even amidst the crisis, airports are continuing to provide lifeline services to the Highlands & Islands communities and the UK Crown Dependencies and freight services to ensure vital supplies (including medical supplies) arrive in the UK.

“They are also the base of operations for UK search and rescue operations, for offshore oil, gas and wind farms that provide vital energy supplies and they play a critical role in the management of UK airspace.

“All of that is now put at risk by the government’s decision. While countries across Europe have recognised the vital role airports play and are stepping into the breach, the UK government’s decision to take a case-by-case approach with dozens of UK airports is simply not feasible to provide the support necessary in the coming days.

“Not only does the decision today leave airports struggling to provide critical services, it will hamper the UK recovery.

“In addition to financial support, the support package should have included sector-wide regulatory alleviations, to reduce costs today and put in place the measures necessary to support airports, ground handling agents, air navigation service providers and others in their operational recovery once the pandemic recedes.

“We urge the government to reconsider and at the very least provide a comprehensive package of support for airports and ground-based services, to ensure the UK’s critical aviation infrastructure is ready to take off once the Covid-19 pandemic recedes.”

Tim Alderslade, chief executive of industry body Airlines UK, said: “It is essential that the economy-wide measures announced thus far are implemented as quickly as possible, with accompanying furter guidance, to support airloines through this unprecedented period.”

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The AOA detailed what it wants the support to include:

• Increase the flexibility of the employment retention scheme to take account of the airport context, including, for example, around mandatory training and certification requirements and ability to maintain a skeleton staff to continue critical operations.

• Extending business rate relief to airports, airport retail and hospitality businesses and other airport support companies.

• In addition to VAT deferral, deferral of all other taxes, such as corporation tax, for the duration of global flight restrictions.

• Require banks and bondholders to temporarily not enforce financial performance-based banking covenants.

• Suspend regulatory costs on airports where possible, including by deferring deadlines on mandated investments such as Next Generation security scanning equipment.

• Provide relief from airport policing costs.

Montserrat Barriga, director general of the European Regions Airline Association, said: “The Covid-19 outbreak is not just a public health crisis, it’s an economic emergency that is already having a substantial effect on our industry.

“Airlines are struggling and given the enormous cut in passenger revenues for the summer months ahead, this is not going to change any time soon.

“We need to ensure a comprehensive basket of relief measures are made available to the aviation industry, and that best practices are implemented across countries.

“Now is the time that the European Commission, member states and their governments must act, to provide the financial support needed to secure the very survival of our industry and Europe’s future economic growth and connectivity.”

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