In response to the UK Chancellor’s communique to airlines, highlighting that there will be no specific nationwide bailout package for the country’s aviation industry – as widely reported by the UK press yesterday and today – the UK airline industry has issued a mixed response.

 

According to reports by Sky News, BBC, The Guardian and The Financial Times, among many others, in a letter to airlines, Sunak said that the Government will only offer financial aid as a ‘last resort’ and each airline will be looked at on a case-by-case basis.

 

Commenting on the Government’s decision not to support airlines and airports with one, comprehensive package, but take a case-by-case approach instead, Chief Executive of the Airport Operators Association (AOA) Karen Dee said:

 

“After having publicly announced a support package for airports and airlines, we’re surprised by where we find ourselves today. Our industry will now have to fight on its own to protect its workforce and its future.

 

EASYJET AND RYANAIR GROUND FLEETS

“With passenger numbers approaching close to zero, UK airports have seen a major drop in revenue. They are taking unprecedented steps to safeguard airport staff and operations through this crisis, which could include in some cases considering shutting down for a period of time. This could have major impacts for UK communities and businesses.”

 

Ryanair and easyjet both issued statements yesterday that they will ground the majority of their respective fleets.

 

“These are unprecedented times for the airline industry,” said easyJet CEO, Johan Lundgren.

 

“Significantly reducing our flying programme is the right thing to do when many countries have issued advice to their citizens not to travel unless it is essential and the aircraft groundings will also remove significant levels of variable costs at a time when this remains crucial.”

 

‘NOT A FEASIBLE DECISION’ FROM THE UK GOVERNMENT

In her statement, AOA’s Karen Dee said that the UK’s aviation industry should be applauded for continuing to provide lifeline services to the Highlands & Islands communities and the UK Crown Dependencies and freight services to ensure vital supplies (including medical supplies) arrive in the UK.

“All of that is now put at risk by the Government’s decision. While countries across Europe have recognised the vital role airports play and are stepping into the breach, the UK Government’s decision to take a case-by-case approach with dozens of UK airports is simply not feasible to provide the support necessary in the coming days.”

 

“We urge the Government to reconsider and at the very least provide a comprehensive package of support for airports and ground-based services, to ensure the UK’s critical aviation infrastructure is ready to take off once the COVID-19 pandemic recedes.”

 

At an IATA Media Briefing on COVID-19 held yesterday, the association’s Director General and CEO, Alexandre de Juniac emphasised that the global aviation crisis had ‘deepened’.

 

AVIATION REVENUE LOSS COULD REACH $252BN

“Revenue losses could reach $252bn this year and governments need to act fast with financial relief to avoid a liquidity crisis.

 

“Airlines are desperately trying to survive in the most difficult times imaginable. We have the people and the experience to see this through. But, to be perfectly frank, we don’t have the money. And we need governments to bridge us to the point where we can start to recover.”

 

He also thanked many governments around the world for understanding the critical role of aviation. Among countries committing to financial relief are Singapore, China, Hong Kong, Australia, Brazil, New Zealand, Qatar, Colombia, Sweden and Denmark, Norway, and Finland. Several other governments are in the consideration stage—including a $58 billion package in the US and significant support measures from the European Central Bank.

 

‘EVERY DAY MATTERS’

“My message to governments that have taken up this cause is to say thank you for leading,” added de Juniac. “Keep watching the situation as it develops because we may need you to do more. My message to governments that are considering doing something is to hurry-up. Every day matters. For all the others, the potential for a $252bn fall in revenues is an alarm bell. This is apocalypse now and you must act fast.”

In response to the Chancellor’s letter, Tim Alderslade, Chief Executive of Airlines UK, the industry body representing UK-registered airlines, said that he actually welcomed Rishi Sunak’s announcement.

 

“We welcome the announcement that Government will enter into negotiations with individual airlines seeking additional bespoke support, recognising the fundamental importance of the aviation sector to the UK economy and the particular challenges faced by airlines in the face of travel restrictions that have all but eliminated airline revenue, but not airline costs, which are substantial and not solely restricted to wages.

 

“It is essential that the economy-wide measures announced thus far are implemented as quickly as possible, with accompanying further guidance, to support airlines through this unprecedented period and, alongside any additional bespoke or sector-wide measures, enable aviation to support a strong UK recovery from the current crisis in the months ahead.”