Airlines are calling for an extension of the government’s Coronavirus Job Retention Scheme to help recovery at a time when demand is expected to be weak.
Trade body Airlines UK has written to chancellor Rishi Sunak warning that that if the scheme is “withdrawn prematurely, carriers experiencing only a tentative revenue recovery will face a renewed cash crisis”.
The letter from chief executive Tim Alderslade said: “We believe that the scheme will need to be extended beyond June, and that consideration should be given to measures – including a ‘tapering’ of the scheme or a review on a sectoral basis – to avoid aviation facing a cliff-edge post-June, whilst services are scaled-up.”
The letter was sent amid ongoing deliberations by the Treasury about the provision of taxpayer support to the aviation industry, Sky News reported.
Carriers have already called for additional help from the government on regulatory and air traffic control charges.
Sunak has said that the government will only consider bailing out individual carriers “as a last resort”, dealing a blow to airlines including Virgin Atlantic which continues to argue its case for a £500 million bailout.
Alderslade wrote: “Research by Iata has shown that a substantial number of travellers are likely to delay a return to travel, and a majority could wait until they have greater certainty around their own personal finances.
“There is early evidence of this trend in the Chinese and Australian markets, where domestic demand has continued to deteriorate or remain at substantially reduced levels even after the rate of new infections has fallen significantly.”
Airlines UK also told welcomed the creation of a ‘Restart and Recovery’ unit within the Department for Transport.
“This work will also examine economic and policy measures to support the sector, and we remain clear that further such measures will undoubtedly be required to get UK aviation back on a competitive footing and to maintain its critical role in the UK economy and as the third-largest aviation market in the world,” Alderslade said.
Vouchers sanctioned in Europe
The Airlines UK appeal came as two former UK aviation ministers called for the government to follow other European countries in relaxing compensation rules to allow the use of credit vouchers for a limited time to help carriers retain revenue and handle the volume of refunds.
Immediate past aviation minister Paul Maynard MP told The Telegraph: “In time people will want to travel again. It won’t do anyone any good for UK aviation to be decimated by this crisis, reducing choice and competition.
“This has been recognised elsewhere in Europe and by our competitors so whilst it doesn’t mean airlines should get a blank cheque, UK government should reach a compromise solution that works for consumers and the industry and not hide behind the EU institutions we have already left.”
Robert Goodwill MP was responsible for aviation policy between 2013 and 2016. He said existing EU law was not designed for such stark situations and that the UK government should acknowledge this.
“We need to strike the right balance between the interests of the consumer and ensuring we still have an aviation industry when we get through this,” he said.
“It’s surprising though that the UK is sticking rigidly to EU law when so many member states are actively lobbying the [European] Commission to try to agree a compromise.
“The UK government should be working with countries like Germany and the Netherlands who understand the problem and are actively seeking a solution.”
