UK airports are in a “dire” position, the outlook is “deteriorating” and there is “a real prospect” 2021 will be no better than a “disastrous 2020”, the Airport Operators Association (AOA) has warned.
In an Airport Recovery Plan published last week, the AOA said: “Even if the global vaccine rollout goes well, it could be 2025 before airports see 2019 levels of passengers again.”
It described a full traffic recovery by 2025 as “an ever more unlikely prospect”.
The AOA warned “the damage to balance sheets will take years to repair” and said the recovery would be slower outside the southeast, noting: “Regions outside London and the southeast have seen the worst impacts from the decline in traffic, especially on long-haul routes, [and] are likely to see a much slower recovery.”
The association also warned pressure to offer discounts and incentives to airlines would disproportionately affect smaller airports and income would remain lower “due to continuing social distancing measures and economic difficulties” among consumers.
It urged the government to “significantly increase financial support to airports to ensure they stay open” and “set a pathway” to ease restrictions, noting support for airports to date “compares poorly to the UK’s competitors”.
The report presented three possible recovery scenarios, only the best of which – based on a successful vaccine rollout – would see traffic by 2025 overtake 2019’s level but with “international business and long-haul leisure traffic below 2019 levels”.
A second scenario, based on continuing restrictions and “incompatible regulations” in many long-haul destinations, would leave traffic in 2025 below the 2019 level, while a third scenario – in which there is a resurgence of the virus and renewed restrictions – would see “traffic grow weakly” and remain “well below” the level of 2019 in 2025.
However, the AOA warned the reality could be worse. It noted: “This analysis does not take into account the renewed lockdown and travel restrictions of late December and January.”
The report found airports now “carry high levels of debt” and have “radically cut capital investment and let go of many staff”. The AOA has previously estimated 110,000 UK aviation jobs could disappear.
AOA chief executive Karen Dee called for “a comprehensive aviation recovery package”, warning: “This summer must be a success for aviation if airports are to survive.”
Transport secretary Grant Shapps defended the government’s record on aid last week, telling the transport select committee: “We’ve provided £7.2 billion to aviation. We provided furlough to 52,000 aviation staff, worth £1.2 billion. We provided the Covid Corporate Financing Facility scheme worth £3 billion. We provided guarantees for loans through UK export finance of £3.4 billion – £1.4 billion to easyJet and £2 billion to British Airways. These are large numbers.”
Shapps promised a long-awaited Aviation Recovery Plan would appear “later this year” but declined to give a date.
Heathrow chief executive John Holland-Kaye, said that although the airport supports the government’s measures to protect public health, described them as “essentially a border closure”.
He added: “We need to see the flight plan for the safe restart of international travel as part of the prime minister’s roadmap on February 22. We also need to preserve our vital aviation infrastructure to support economic recovery when it comes and make Global Britain a reality.
“That means the Chancellor must use next month’s budget to deliver the minimum help that aviation needs with 100% business rates relief and an extension of the furlough scheme.”