The UK aviation sector is calling for urgent government support after Boris Johnson’s announcement that the UK would introduce a 14 day quarantine for people arriving in the country by air.
Industry bodies have condemned the lack of detailed information on the announcement, which they say will deepen the crisis being faced by the industry even further and cast doubt over tentative plans to restarts flights in July. Tim Alderslade, chief executive of Airlines UK, told the Financial Times that the appeal had been issued following a conference call between carriers, airport operators and aviation minister Kelly Tolhurst on Sunday. He told the FT that executives had been left frustrated by a lack of detail over the government’s proposals.
Quarantine measures will threaten future of airlines
The announcement on air passenger quarantine was made alongside a number of measures aimed at avoiding a second wave of coronavirus infections. It was included in the Prime Minister’s phased lockdown exit plan in a televised address to the nation last night. The announcement has exacerbated fears within the industry that lockdown restrictions, along with an anticipated slow recovery in demand, will threaten the future of many airlines.
Most of the world’s passenger aircraft have been grounded since the restrictions were put in place in March. London Heathrow which is both the UK and Europe’s busiest airport, has forecast a 97 per cent drop in passenger numbers in April compared with the previous year.
Johnson said that the government “impose quarantine on people coming into this country by air,” – but without announcing a timeframe for introduction or how long restrictions might remain in place.
Industry faces “existential crisis”
The FT reported an official source who added that it would be “a few weeks” before the measure was introduced. The sector has united in its call for an urgent meeting with ministers to address the “existential crisis” as airlines continued to axe orders for new aircraft to cut costs.
The industry has been left frustrated at the government’s failure to supply greater detain on the measures including when quarantine would be imposed, how long it might last and the indicators or metrics which would need to be met before the measures are lifted.
The FT reported one executive had likened the approach to “sleepwalking” the sector into an “uncompetitive position across Europe”. The executive also added: “The lack of urgency over the fate of UK aviation is the most alarming thing.”Paul Everitt, chief executive of ADS, warned chancellor Rishi Sunak last week that the impact of the pandemic was “stark for many of our members” and could cut annual revenues this year by £5bn.
Everitt called for rapid government intervention as the sector braced itself for a wave of job losses and cuts as both Boeing and Airbus cut production significantly. Rolls-Royce announced last week that it would axe around 8,000 jobs, while Airbus has also written to its staff warning of significant job losses.
Industry calls for extension of job retention scheme until autumn
The effects of the massive production cuts are expected to filter down through the supply chain in the coming weeks. To mitigate the crisis, Airlines UK has already called on the government to suspend air passenger duty, air traffic control service fees and levies for funding aviation regulator the Civil Aviation Authority. Individual carriers will also seek government support on a case-by-case basis.
Aviation executives told the FT that they also want an extension of the job retention scheme until October, assuming quarantine measures stay in place throughout the peak summer season.
Mr Alderslade added that the urgent government support was needed as ministers were “effectively telling people they can no longer travel for the foreseeable future” and airlines would respond to the drop in demand by prolonged grounding of their operations.
The FT reported that the government had recognised the difficulties within the sector and remained in regular contact with senior executives. The government remains open to providing business support on a case-by-case basis to companies but only after they had explored and exhausted all other funding avenues, including private funding options.
easyJet, Wizz Air and IAG, British Airways’ parent, have already accessed the government’s emergency financing facility while Virgin Atlantic remains in discussions over its request for a £500m package of commercial loans and guarantees.
Penalties will be enforced for breach of quarantine regulations
Passengers are expected to notify UK authorities before arrival of the location where they will self-isolate after their arrival in the UK. Penalties will be enforced for breaches of the regulations.
Last week British Airways announced a “meaningful” return to service could be launched in July, but the quarantine measures announced yesterday could cast doubt on the viability of restarting flights. Chairman of British Airways’ parent company, Willie Walsh, told parliament’s transport committee that IAG would review its plans to resume flying in July if the government pressed ahead with the quarantine plans.
Quarantine plan throws BA’s July flight restart plan into doubt
While Walsh said IAG was not asking for a bailout package from the government, he said the quarantine plan would add to existing pressures on the group.
He said: “We’ve probably exhausted every avenue that I can think of at this stage to shore up our liquidity. The cash has been reducing significantly and that will be the case as we go through May, June and July.”
“The announcement yesterday of a 14-day period (of quarantine) for coming into the UK, it’s definitely going to make it worse.”
Measures could put UK economy in “third gear”
Karen Dee, chief executive of the Airport Operators’ Association, warned airports could not survive an extended quarantine period. easyJet has urged ministers to keep the quarantine in place “for a short period, while the UK remains in lockdown.”
Heathrow Airport has also urged the government to give greater detail on its quarantine measures and overall strategy for exiting the lockdown. The airport has stated that a clear exit strategy was vital to assist the struggling industry, with British Airways, Ryanair and Virgin Atlantic all announcing major job losses over the past week.
Heathrow CEO, John Holland-Kaye said: “Aviation is the lifeblood of this country’s economy, and until we get Britain flying again, UK business will be stuck in third gear.”
The airport has echoed the industry’s call for further details on the measures designed to prevent the spread of COVID-19 from overseas which exempts passengers arriving from France from the forthcoming UK coronavirus quarantine measures.
Heathrow claims that the 14 day quarantine plan will “effectively close borders temporarily” adding that it was likely that few passenger flights would operate until the quarantine is lifted.
Holland-Kaye added: “Without long haul passenger flights, there will be very limited trade as 40 per cent of UK exports and inward supply chain travels in the cargo holds of passenger planes from Heathrow. Until people can fly freely again, industries in all corners of the country will remain stagnant.”