The UK’s Airport Operators Association (AOA) has published its Airport Recovery Plan, based on a report commissioned from business consultancy Steer.

Based on analysis before the pandemic worsened, Steer estimated that passenger numbers would not return to 2019 levels any earlier than 2025 in the most optimistic scenario (a gradual easing of travel restrictions in 2021 in line with a successful vaccine roll-out across the globe).

AOA’s Chief Executive described 2020 as “a devastating year.” With increased restrictions already in place this year, Dee also said that “the start of 2021 has so far dashed airports’ hopes that this year will be significantly better.”

She also underlined that if airports are to survive in the coming years, “this summer must be a success for aviation.” Failing to support airports now and not providing them with a clear pathway towards the restart of the industry will have a major impact on UK jobs and economic growth, not just in the short term but also up to 2025 and beyond.

“A comprehensive Aviation Recovery Package is needed to see airports through the immediate government-ordered shut-down of aviation. This must include targeted financial support as well as a clear pathway to re-start across the four UK nations by easing travel restrictions when it is safe to do so, including through testing.

“The UK and devolved governments should then set out measures to boost airports’ chances to make a success of the recovery. We will be competing fiercely with other countries for the return of other airlines and routes. We cannot afford the UK to lag behind our global competitors,” Dee continued.

According to Steer’s analysis, airports have had to increase debt levels and seek concessions from lenders to provide liquidity to manage this crisis. Already carrying high levels of debt airports are high fixed-cost businesses. Some of their highest fixed costs are government related charges, including business rates, policing and regulatory costs. And with no revenue, this is resulting in significant losses. In addition AOA has previously estimated that 110,000 jobs in aviation could disappear in airports and their supporting businesses.

In addition, if and when a recovery comes, Steer’s analysis suggests this is expected to have challenging impacts for the UK.

The routes that will recover first are short-haul, high-yield routes to popular travel destinations while routes important to business, such as long-haul routes, will see a much slower recovery. This will mean fewer jobs and economic opportunities. It will also undermine the UK Government’s ambitions for a globally trading Britain.

Plus, regions outside London and the South East as well as the three other nations in the UK have seen the worst impacts from the decline in traffic. They are also likely to see a much slower recovery, which will impact the UK Government’s levelling-up agenda and the devolved governments’ economic priorities, such as inclusive growth.

Steer’s analysis also finds that the damage to balance sheets will take years to repair: a recovery in passenger volumes will not see a corresponding recovery in airport revenue. Airports will compete heavily with other European airports for the return of cash-strapped airlines through discounting and incentives while revenue from passengers will be lower due to continuing social distancing measures and economic difficulties.

With the risk that 2021 could look like 2020, the industry urgently needs additional, aviation-specific support from the UK and devolved governments. In its Airport Recovery Plan, the AOA underlines that in the short-term the government needs to:

Significantly increase its financial support to airports to ensure they can stay open to continue to serve the critical and lifeline services that are still flying, such as emergency services, freight and maintenance for offshore oil, gas and wind farms.

It also needs to set out a pathway to ease and ultimately remove travel bans and quarantine measures through an ambitious approach to testing and  vaccination and then lead the work for a common global approach on that basis.

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