The impact of the coronavirus pandemic on the aviation sector Contents

Summary

The global coronavirus pandemic in 2020 has reached, to some degree, into all areas of the UK and world economy. Few industries, however, have been affected as significantly as aviation. Aviation was one of the first industries affected by the pandemic, as national governments closed international borders to prevent non-essential travel. In the UK, the Foreign and Commonwealth Office advised British nationals on 17 March 2020 against all non-essential global travel. Thousands of holidaymakers and business travellers had their pre-booked flights cancelled. Around the world thousands of planes were grounded and left idle on tarmac.

The drastic reduction in air travel—a 97% reduction in passenger flights compared to the previous year—has been devastating for the aviation industry, with estimates that the industry in the UK could lose over £20 billion in revenue in 2020. The sector is also of huge strategic and economic importance to the UK. Finding a proportionate way to steadily resume the number of flights while minimising the spread of coronavirus must be a priority for the UK Government.

We are concerned about the Government’s decision to introduce a blanket 14-day quarantine period for travellers to the UK from other countries. This will further damage both the recovery of the sector and the wider economy. We are not persuaded this is the right policy option at this time compared to the alternatives. We support a more targeted and nuanced border control policy that would allow people travelling from countries where the infection rate of Covid-19 is relatively low to enter the UK on a less restrictive basis. Should the conditions allow in late June, we strongly urge the Government to introduce a more flexible and risk-based approach to border control.

Many companies in the aviation sector have understandably accessed Government financial support during this difficult time. This support has primarily taken the form of generic schemes available to deal with the pandemic, rather than sector-specific support. Given the gravity of the crisis in the aviation sector, we recommend that the UK Government implements support measures aimed at the sector in order to stimulate demand and protect businesses. We recommend that the UK Government and the devolved administrations (where they have not already done so) introduce a 12-month business rates relief for airlines and airports and a six-month temporary suspension of Air Passenger Duty payments.

The loss of some jobs in the aviation sector may sadly be inevitable. But such fundamental decisions about people’s livelihoods should not be made prematurely and until there is clearer information about the industry’s recovery. We urge UK-based aviation employers not to proceed hastily with largescale redundancies or restructuring to terms and conditions of employees until the Job Retention Scheme ends in October 2020 and they have had the opportunity to consider the Government’s plans to help the sector restart and recover.

We examined in detail British Airways’ plans to consult on up to 12,000 redundancies and downgrade the terms and conditions of approximately 35,000 employees. Thousands of British Airways employees contacted us to raise their concerns about the potential impact of the changes. Our view is that the current consultation on staffing changes is a calculated attempt to take advantage of the pandemic to cut jobs and weaken the terms and conditions of its remaining employees. The behaviour of British Airways and its parent company towards its employees is a national disgrace. It falls well below the standards we would expect from any employer, especially in light of the scale of taxpayer subsidy, at this time of national crisis.

Many airlines and travel operators have failed to refund customers for package holidays and flights in a timely manner, in accordance with their legal obligations. This is an understandable source of frustration for many customers who have found the process for obtaining monetary refunds unnecessarily difficult. People under stress because of the pandemic have faced additional stress because of companies who have not refunded their money properly and promptly. We recommend that before the Government brings forward its planned Airline Insolvency Bill, it consults on whether protections should be introduced for airline passengers in the event of pandemic or other extraordinary circumstances.

The Department has set up an Aviation Restart, Recovery, and Engagement Unit and the Minister for Aviation told us she is devising a strategy to help the sector recover. While these moves are necessary and welcome, we are concerned at the lack of detail and pace of action given the precarious situation facing many airlines and the wider implications for the economy. We believe and expected that the Government’s strategy for the recovery of the aviation sector should be more developed given we are already some four months into the crisis.

We recommend that the Department for Transport, working with other Government departments, the devolved administrations and those within the industry, publishes a strategy for the restart and recovery of the aviation sector as soon as possible. This strategy must include details as to how the Department will rapidly restore passenger air travel and in particular set out plans to:



Published: 13 June 2020