Editor’s comment: What lies ahead?

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Although the end of 2020 brought with it a glimmer of hope following the promise of a COVID-19 vaccine being rolled out around the world and a post Brexit UK-EU trade deal being agreed, the new year has so far got off to a rocky start. New strains of the coronavirus (first detected in the UK and South Africa in December) have prompted dozens of travel bans and widespread concern about what this all means for countries around the world.

Many countries have already reacted by closing their borders and suspending commercial flights to restrict the spread of any new strains and, on Monday 4 January, the British Prime Minister, Boris Johnson, declared another nation-wide lockdown until the end of February at the earliest with other countries also reintroducing or extending their own lockdowns. It՚s yet another devastating blow to airports and the aviation sector as a whole.

“While airports understand the public health reasons behind the renewed lockdown, it comes on top of the EU’s ban on UK nationals travelling to the EU for non-essential purposes,” said Karen Dee, the Airport Operators Association’s (AOA’s) Chief Executive.

“We are fast approaching a full twelve months of aviation being effectively shut down, with only limited support for UK airports provided to date,” she continued.

AOA is calling on the UK Government to step up its support for the aviation sector and to cover operational losses during the current heightened restrictions, as well as to extend all existing forms of support until aviation is able to operate free from the barriers that have prevented any meaningful recovery to date.

“The UK aviation industry will play a crucial role in enabling the country’s economic recovery and Global Britain, but can only do so if it gets the support necessary to get through the coming months and years,” Dee concluded.

And while Eamonn Brennan, EUROCONTROL’s Director General, is confident that the recovery will start to firm up in 2021 as the vaccine rolls out across the globe, he also warned that continued financial support is required across the aviation sector in the years ahead. “If we’re ready to ՙbuild back better՚ in 2021, we must start tackling core issues, such as the way the aviation system is financed, regulated and integrated,” he said.

It might not be quite the bright, shiny start to 2021 we had all hoped for, but now is certainly not the time to give up. It’s time to buckle up for the long road to recovery, but recover we will!

Otherwise, I’d like to wish you all a Happy New Year and please do get in touch if you’ve got a story you’d like to share.

Best wishes,

Chloë Greenbank

Editor, Regional Gateway

 

heathrow test and release

Editor’s comment: A step in the right direction

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heathrow test and release

Airports across the UK have this week breathed a collective sigh of relief following the announcement that from 15 December the UK Government will reduce the 14-day period of self-isolation to five days for international arrivals, on receipt of a negative COVID-19 test.

The Government has also introduced financial support designed to provide commercial airports and ground handlers in England with relief equivalent to their business rate costs, capped at £8 million per site.

A spokesperson for Doncaster Sheffield Airport described the news as, “A step in the right direction for what has been a punishing year for airports.”

While passengers will be expected to meet the costs of getting a COVID-19 test themselves, one of Doncaster’s biggest operators Wizz Air is offering passenger discounts on COVID tests. “We are committed to getting the UK flying safely again,” said Wizz Air UK’s Managing Director, Owain Jones. “So it is with great excitement that we announce our partnership with Confirm Testing, through which our customers can secure the necessary testing services at a specially discounted price.”

Andrew Bell, Chief Executive of Regional and City Airports (which owns and operates Bournemouth, Coventry, Norwich and Exeter airports) added:

These announcements are a much-needed boost as aviation looks to bounce back from the greatest challenge it has ever faced, with regional airports having been amongst the hardest-hit sectors by the pandemic… We will continue to lobby hard and work with Government on what other steps can be taken to safeguard the UK’s regional airports.

However, while the Government’s policy on financial support has been welcomed by smaller airports in England, not all airports will see full business rates relief. The UK’s primary hub, London Heathrow – one of the UK’s largest business rates payers, with an annual bill of around £120 million – is a case in point.

John Holland-Kaye, CEO at London Heathrow, underlined that the business rates grants for English airports fails to provide any significant relief for larger airports, which are so crucial to providing the international connectivity needed by the UK after Brexit.

“The proposed reduction in business rates for Heathrow is only 7%, compared to an 82% reduction in passengers,” he said, explaining that despite suffering a £1.5 billion loss in the first nine months of this year, Heathrow will continue to pay a large majority of this sum, as a result of the Government failing to assess the contribution paid by airports on a case by case basis.

“Small airports in England, and all airports in Scotland and Northern Ireland have had a 100% waiver from business rates. The Government’s proposed approach is discriminatory against large airports, and we will now carefully consider our next steps,” Holland-Kaye concluded.

While not music to the ears of all airports, the UK Government’s announcement will certainly go some way to supporting high fixed-operating costs for regional hubs that have seen more than an 80% reduction in passenger traffic, resulting in a catastrophic loss of revenue.

Enjoy your weekend and remember to register for your complimentary copy of the December issue of Regional Gateway magazine by subscribing here.

Chloë Greenbank

Editor, Regional Gateway

AOA AGM Airport panel

Editor’s comment: Are the storm clouds finally clearing?

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AOA AGM Airport panel

It would seem that for aviation (and the world at large), hope is finally on the horizon following promising news on the COVID-19 vaccine front. Pfizer and its partner BioNTech’s announcement that early study results indicated their vaccine was more than 90% effective in protecting people from the virus that causes COVID-19, sent airline stocks soaring. Eurocontrol’s Director General, Eamonn Brennan, described the vaccine breakthrough as “encouraging”, saying it “could have a huge impact on aviation”.

Speaking at the Airport Operator Association’s (AOA’s) AGM on Monday 9 November, the UK Transport Secretary, Grant Shapps, stated that, “The primary solution has to be getting passengers flying again safely, ideally through a vaccine, but before that through effective testing.” He also committed to a new ‘test and release’ scheme for UK airport operators that will start once the nation’s current lockdown is over (2 December) to allow a “much reduced period of self isolation” for those arriving in the UK. “Beyond the lockdown,” he said, “this should encourage people to book flights with confidence.”

Referencing the critical role that the UK’s regional airports play both in the country’s economic recovery and in providing regions with an identity and a sense of pride, Jim McMahon, Shadow Secretary of State for Transport, argued that “Government must do more to support these vital hubs.” He also underlined there hasn’t been enough cross-governmental support between European countries, as he stated that: “Frankly, the UK Government has been too late in coming to the table on this and leading the way especially for airports.”

Robert Sinclair, CEO of London City Airport, described current quarantine regulations as a “patchwork quilt of travel restrictions that are crippling the industry”. However, he was also cautiously optimistic about the future, saying: “Demand is there for air travel, we saw that in July when travel restrictions were relaxed… But harmonised departure protocols must be put in place.” Rob Bishton, Director of Safety and Airspace Regulation at the UK’s Civil Aviation Authority, agreed that until a vaccine is in place “testing is the progressive solution that can be used to avoid repeating the same problems for aviation next year as we’ve had this year”.

Meanwhile, Karen Smart, Managing Director at Manchester Airport, said that not enough support is being offered to airports.  “They are high cost businesses. You can’t just furlough staff, shut the doors and say costs have gone away. But our government has failed to recognise that and provide adequate support.”

Gatwick’s CEO, Stewart Wingate, gave a nod to the need to ‘build back better’ with a sustainable aviation industry. “We want to see increased production and supply of sustainable aviation fuel, and we want to work alongside government in developing clear strategies for the use of hydrogen and electric technologies.” Echoing this message, Derek Provan, CEO at AGS Airport Group (which owns Aberdeen, Glasgow and Southampton airports), also believes that the industry will grow and build back better as we start to focus on the future.

The messaging was similar at the African Airline Association’s (AFRAA’s) AGM, where Ali Tounsi, the Secretary General for Airports Council International (ACI) Africa said that overall passenger traffic in 2020 will be down 60%, costing the industry US$2.6 billion. He urged local governments to support their airports and alleviate the financial impact of the pandemic through measures, such as waiving airport concession fees, providing loans and grants, as well as tax relief for the aviation sector and help with the cost of public health measures in airports.

Tounsi also called for wider collaboration and cooperation between airports, airlines and regulators. “They must be united in their view that a consistent approach to testing passengers is key to restoring passenger confidence, as well as preventing border closures and quarantine restrictions that have slowed Africa’s aviation recovery.” While contactless solutions involving biometric and self-service technology will be integral to the future of African airports and reducing the risk of virus transmission, the cost of rolling out new technologies in this area will be prohibitive for some airports and especially Africa’s smaller regional hubs.

However, like his European counterparts, Tounsi concluded: “I remain positive about the future. Airports are vital to aviation’s ecosystem and they will play an integral role in the global economic recovery.”

Much of 2020 has been a tale of two halves. It’s been about battening down the hatches to survive the storm, but also about resilience and optimism that once this pandemic is over the industry will recover as quickly as it can, so long as the appropriate measures are in place.

Have a great weekend,

Chloë Greenbank

Editor, Regional Gateway

Header image: From right to left – Karen Dee, AOA; Rob Bishton, CAA; Derek Provan, AGS Group; Stewart Wingate, Gatwick Airport; Karen Smart, Manchester Airport; Robert Sinclair, London City Airport.

Stansted Airport

Editor’s comment: Locked down (again)…

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Stansted Airport

In line with new lockdown measures in England that came into effect on Thursday 5 November, airports and their associated businesses across the country are bracing themselves for the impact of an international travel ban.

In the days leading up to the Thursday lockdown deadline, airports saw a mass exodus with more passenger traffic than they have seen for months. While the UK’s first nationwide lockdown saw supermarket shelves being raided and loo-roll becoming the must-have currency, this time round rather than hunker down at home some Brits have been a bit more savvy, hopping on flights to escape the impending lockdown. Others have flown off for work while they can or back home to their families. London Heathrow reportedly hired extra staff to meet the demand on the last day before lockdown.

However, as of this morning all outbound international travel will be banned except for in exceptional circumstances. Industry leaders representing UK airports and airlines described the ban as a hammer blow underlining that it would mean “airlines and airports, already hamstrung by quarantine, are closed businesses.”

Criticising the lack of warning that was given ahead of the ban, Charlie Cornish, CEO of Manchester Airport Group (MAG), which owns and operates Manchester, London Stansted and East Midlands airports, said: “The government’s decision to ban people from travelling abroad came without warning and with no discussion with the industry about the support it will receive to help get it through this period.” He added that, “Twitter is not the place where you want to find out that the government is effectively shutting down the business you run.”

A core exit strategy from this second lockdown and a vital action to help rebuild the UK’s economy must be the government adhering to its own deadline to have passenger testing at airports up and running by the beginning of December. “If countries like Germany were the hare, racing ahead in establishing a system that got people flying again, we hoped to be the tortoise – slow out of the blocks but with a regime we were told would be ‘world leading’ when in place,” Cornish concluded.

“Instead, we are reacting to news that leaves many in our industry facing a very bleak future.”

Now is the time for the UK Government to level the playing field and deliver the dedicated support for airports and airlines that has been provided for other sectors. Relief from business rates and policing costs, as well as support for those employees whose livelihoods are at risk and a review of passenger taxes will be critical if airports are to win back popular routes and plot the quickest possible route to recovery.

I hope you enjoy this week’s newsletter and have a great weekend.

Chloë Greenbank,

Editor, Regional Gateway

Airports and airlines respond to new new lockdowns and travel bans

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Responding to the announcement of a ban on international leisure travel as part of new lockdown measures in the UK, Henry Smith, Chair of the All-Party Parliamentary Group for the Future of Aviation, said: “The COVID-19 announcement on international travel restrictions is another serious blow to the already beleaguered aviation, travel and tourism industries, its employees and the communities who rely on them.”

He added that the announcement reinforces the need for immediate financial support to help our aviation industry survive. “We can’t have a global Britain without a thriving aviation sector and the consequences of failing to act to protect them are simply unthinkable.”

Smith’s message was echoed by Karen Dee, Chief Exeutive of the Airport Operators Association (AOA) and Tim Alderslade, CEO of Airlines UK. In a statement the pair described the announcement as a 180-degree reversal of policy, since the UK Government added the Canaries to the travel corridors list just last week.

“Aviation has been devastated by the pandemic and has essentially never had the opportunity to recover. A ban on international travel means airports and airlines, already hamstrung by quarantine, are closed businesses and will require financial support now – which other sectors like hospitality have received, alongside a comprehensive restart package.

“This needs to include immediate additional economic support for the winter and steps to support recovery, including urgent roll-out of a testing regime, business rates relief for airports, and an emergency waiver of Air Passenger Duty that will be essential for enabling and stimulating international travel – absolutely vital for the UK economy – for as long as we are living with this virus.”

The pair also underlined that hundreds of thousands of jobs are on the line, as is the UK’s economic recovery.

Meanwhile, Charlie Cornish, CEO of Manchester Airports Group (MAG), warned of the need for airports to act quickly to secure their future if urgent support is not provided.

Cornish reiterated that the British Prime Minister should offer an “urgent package of support” to aviation, pointing to dedicated support given to sectors such as retail, hospitality and the rail industry, while aviation has been left to fend for itself.

He also bemoaned the fact that the industry learned of the new travel ban on social media. He said: “Twitter is not the place where you want to find out that the Government is effectively shutting down the business you run.”

MAG, which operates Manchester, London Stansted and East Midlands airports in the UK, has recently begun a consultation proposing that up to 892 jobs at its airports will be sadly made redundant. The group has consistently called for more targeted support for aviation since March when the pandemic and the first lockdown decimated its passenger base.

“Our sector was one of the first hit by this pandemic and one of the hardest hit,” he said. “Promises of specific support in recognition of this predicament were publicly made by government but never materialised. Tens of thousands of jobs have already been lost across the industry as a result of the situation we find ourselves in. An urgent package of support must materialise. That must include relief from business rates and policing costs.”

covid testing at heathrow collinson

Government’s commitment to testing welcomed by UK airports

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covid testing at heathrow collinson

Following pressure from industry associations, trade bodies and aviation stakeholders, the UK Government has launched a new Global Travel Taskforce to consider how a testing regime for international arrivals could be implemented to boost safe travel to and from the UK. It will also look at what steps can be taken to facilitate business and tourist travel through innovative testing models and other non-testing means and more broadly, what steps can be taken to increase consumer confidence to support the recovery of international travel.

The Department for Transport and the Department of Health and Social Care have been working extensively with clinicians, health experts and the private testing sector on the practicalities of testing international arrivals.

To accelerate the work currently being done on proposals for a future testing regime, the taskforce will look at the feasibility of these initiatives based on a single test taken after a period of self-isolation. It will also explore alternative testing models, including pilots with partner countries to ascertain whether self-isolation could be undertaken pre-departure.

Transport Secretary Grant Shapps conceded that, “Our understanding of the science now means we can intensify efforts to develop options for a testing regime and help reinvigorate our world-leading travel sector.” He also stated that, “This new taskforce will not only help us move towards safer, smoother international travel as we continue to battle this virus but will also support global connectivity – helping facilitate more covid secure travel whilst protecting the population from imported cases.”

The group has revealed that it will consult closely with partners from the aviation, travel, healthcare and testing sectors to implement measures to support the recovery of the travel sector.

The Airport Operators Association (AOA) has welcomed the Government’s commitment to testing as a first step, however it has also warned that a system must be implemented as quickly as possible.

“We have been talking about testing since June and many other countries around the world are already successfully using it. We must start the operation of the scheme as quickly as practicalities allow so the UK is not left behind. We believe that from a health perspective a testing regime can be far preferable to just relying on quarantine,” said Karen Dee, AOA Chief Executive. She also explained that airports will work with the Government to get a testing system up and running as quickly as possible.

She added that, “Today’s announcement must be the start of a renewed focus on our sector – it is essential that the Government bring forward the promised Aviation Recovery Package of support including business rates relief for airports in England and Wales, continuation of VAT-free sales airside, funding for the CAA and a temporary suspension of Air Passenger Duty.”

These much needed steps Dee added, will help support airports as they look to tackle the challenging winter months ahead.

“This announcement is positive and encouraging, but it is vital that the Government step up its support to protect our international connectivity,” she concluded.

UK airports to suffer a £4 billion loss in 2020

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The full impact of the coronavirus pandemic on UK airports is proving utterly devastating.

According to the Airport Operators Association (AOA), during the first four months of the pandemic UK airports lost just under £2 billion, the equivalent of more than £150 million per day, or more than £10,000 per minute.

The group predicts that collectively its member airports will lose at least £4 billion in revenue by the end of 2020. This doesn’t account for the multiplier effect on the businesses and wider community within an airport’s catchment.

“These projections reinforce the significant challenges that UK airports continue to face after the worst four months in the history of commercial aviation,” said Karen Dee, AOA’s Chief Executive.

“Whilst we have seen passengers begin to return, passenger numbers are not expected to reach pre-Covid levels for a considerable period and airports will continue to face challenges and pressures unimaginable six months ago,” she continued.

A case in point is Exeter Airport, which despite the Channel Islands-based carrier Blue Islands starting new routes, and leisure carrier TUI restarting its summer holiday programme from 1 August, is cutting jobs. The airport – part of the Regional and City Airports group which also owns and operates Bournemouth, Coventry and Norwich Airports – blames the economic fallout from the coronavirus health crisis for changing the way it must operate. It is understood that 96 jobs will go with those affected employed in a range of roles. They include baggage handlers, air traffic control, ground crew, security and the fire station.

To prevent further job losses and support the sector through the unprecedented crisis, the AOA alongside CEOs of UK airports have written to the Prime Minister Boris Johnson seeking relief from business rates payments for 2020-2021; additional support with employment costs beyond the October end of the coronavirus job retention scheme; funding for the Civil Aviation Authority for the 2020-2021 charging period; and a suspension of Air Passenger Duty (APD) for at least six months to stimulate increased airline activity.

Stating that airports have done everything in their power to weather the storm without specific government support afforded to other sectors, Dee said that the loss of close to £2 billion during the lockdown should serve as a wakeup call to Government. “It should lead them to finally grasp the severity of the challenge and threat that the pandemic has posed and continues to pose to the sector.”

We cannot have a full national economic recovery without a thriving aviation sector; airports are essential components of Britain’s ambition to be a global trading nation and form a vital network for economic stimulus across the UK, levelling up the regions. These figures show that it is high time that the government acts with urgency and supports airlines through the biggest challenge that they have ever faced.

Karen Dee, Chief Executive, Airport Operators Association (AOA).

Airport jobs continue to be at risk as a result of COVID-19

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In the wake of large-scale expected job losses at airports across the UK, the Airport Operators Association (AOA) has called for the UK Government to take robust action to support the country’s beleaguered aviation sector.

With future airline scheduling and passenger numbers forecast to be significantly lower year-on-year, analysis of the association’s member airports suggests that up to 20,000 jobs are at risk. The effect the downturn in traffic at UK airports has on the businesses and wider community around the sites cannot be underestimated. AOA argues that airport operators only directly employ a small proportion of people working at an airport and many other jobs are supported by activity linked to UK airports. Subsequently, the total potential job losses expected across all UK airports and their local business communities is likely to exceed 110,000.

Figures from IATA estimate that from June 2020 traffic will be reduced by 154 million passengers. This in turn will have a knock-on effect on a large portion of airports’ expected revenue and will force cost-cutting measures on operators.

AOA is recommending that the UK Government adopts a range of actions including relief from business rates payments for 2020-2021 in line with the relief granted to the hospitality and retail sectors, aiding companies’ cashflow. It is also asking for a guarantee to support UK airports with their employment costs beyond the October end of the Coronavirus Job Retention Scheme. Other measures being suggested include suspending Air Passenger Duty (APD) for at least six months and replacing the UK’s quarantine policy with a risk-based proportionate approach which includes additional public health measures for passengers arriving from high-risk countries.

“We face considerable challenges in recovering from the devastating impacts of COVID-19 and we are calling on the government to do much more and act with urgency to protect jobs in the aviation sector, many of which are highly-skilled,” said Karen Dee, AOA’s Chief Executive.

“These job figures clearly show that a key component of the UK’s infrastructure is on its knees, with no relief to the current crisis expected. Government needs to recognise the immense crisis facing the country’s airport communities and take action to support UK aviation and protect livelihoods.”