The impact of the coronavirus pandemic on the aviation sector Contents

2. Impact of the coronavirus pandemic on the aviation sector

Strategic importance of aviation industry to UK

8.The UK has the largest aviation network in Europe and the third biggest in the world.5 Around 2.2 million domestic and international flights either departed or landed in the UK in 2018.6 Aviation is a crucial part of the UK economy with an estimated value of more than £28 billion.7 Almost 80% of inbound visitors reached the UK by air.8 Air freight accounts for over 40% of trade by value (despite being less than 1% of the volume of goods shipped).9

9.The aviation sector is also a significant employer in the UK, with some 230,000 workers, including at over 40 commercial airports.10 Within Europe, it is estimated that every person employed directly by the aviation sector, and in aviation-enabled tourism, supports another 4.7 jobs.11

10.Witnesses to our inquiry emphasised the strategic importance of the sector to the wider UK economy. John Holland-Kaye, Chief Executive of Heathrow Airport Ltd, said:

Aviation is not just some other economic sector. It is the strategic sector for the UK. Many businesses up and down the country rely on long-haul flights, many of which go out of Heathrow, to get their exports to global markets. They also rely on those same long-haul flights to bring in critical parts for their manufacturing process, with a just-in-time supply chain. Unless you get those flights moving again […] we will not be able to get the UK economy rebooted.12

11.The airport ground and cargo handling company, Swissport, emphasised the importance of aviation in the context of the UK’s withdrawal from the European Union: “The UK is about to strike out on its own; we are about to go our own way post-Brexit. We are about to embark on trade agreements for the first time in 40 years […] Aviation is key for those trade agreements.”13 Unite the Union emphasised the importance of regional connectivity: smaller regional airports were not only businesses but “critical parts of the regional infrastructure”.14 Some regional airports are wholly or part owned by local and national governments who receive an income from them.

The impact of the pandemic on air travel

12.The coronavirus pandemic has led to an unprecedented decline in the number of flights in early 2020. As seen in Figure 1, the number of air transport movements has fallen to a fraction of usual levels.15 There were 5,800 passenger flights in April 2020 compared to 201,000 a year earlier: a reduction of 97%. The impact is several times more severe than the aftermath of the global financial crisis in 2008, when passenger flights reduced by around 67,000 to 134,000 per month.16

Figure 1: Decline in passenger air travel due to the coronavirus pandemic

13.Industry estimates suggest that passenger numbers may remain below 2019 levels until at least 2022.17 As a result, aviation revenue has declined dramatically. The International Airport Transport Association (IATA) predicts the UK aviation industry faces a loss of revenue of up to £20.1 billion in 2020.18 We explore the financial impact on airlines in more detail in Chapter 4.

14.The Minister for Aviation, Kelly Tolhurst MP, told the House on 3 June that “the sustainable recovery of the aviation sector is a core part of our commitment to global connectivity and growing the UK economy”.19

15.The aviation sector is of huge strategic and economic importance to the UK. The drastic reduction in air travel caused by the coronavirus pandemic has been devastating for the industry. 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.

5 Including to over 370 destinations in more than 100 countries in the world. Department for Transport, Aviation 2050: The future for UK aviation, December 2018, p 6

6 Department for Transport, Aviation statistics: AVI0101, last updated on 17 December 2019

7 Includes both passenger and freight air transport. Office for National Statistics, Annual Business Survey 2018, 15 May 2020

8 Visit Britain, 2019 snapshot, accessed on 10 June 2020

10 Department for Transport, Aviation 2050: The future for UK aviation, December 2018, p 21

11 Air Transport Action Group, Aviation Benefits Beyond Borders, accessed 5 June 2020

12 Qq 65, 67

13 Q 223

14 Q 82

15 The Civil Aviation Authority defines an air transport movement as being: landings or take-offs of aircraft engaged on the transport of passenger, freight, or mail on commercial terms. All scheduled movements, including those operated empty, loaded charter and air taxi movements are including in this CAA definition. Figure 1 shows only those movements that involved passengers, on either scheduled or charter flights, flying international and domestically at all UK reporting airports.

16 Civil Aviation Authority, UK airport data, accessed 10 June 2020

17 “Don’t make a slow recovery more difficult with quarantine measures”, IATA press release, 13 May 2020

18 Airlines UK (CIT0024)

19 HC Deb, 3 June 2020, col 847

Published: 13 June 2020