UK airports are losing £83 million/$109 million per week following the catastrophic drop in passenger traffic levels caused by Covid-19, according to the Airport Operators Association (AOA).

An assessment of AOA members’ financial positions has painted a stark picture that ‘will undoubtedly have a multiplier effect on the businesses and wider communities around UK airport sites’, read a statement obtained by TRBusiness.

AOA has renewed calls for a long-term package of financial support that protects jobs to cradle an aviation sector decimated by the crisis.

Among other proposals are relief from business rate payments for 2020/2021, suspending Air Passenger Duty for 12 months, and continuing VAT-free sales airside, which the government has announced will end next year.

TESTING ‘INSUFFICIENT’ ON ITS OWN

The ‘hammer blow’ decision has sparked consternation among travel retail and air transport associations, retailers, MPs and others, with TRBusiness reliably informed by sources that pressure to reverse the decision is steadily building.

Last month, AOA and the UK Travel Retail Forum penned a joint letter to the Prime Minister urging a u-turn on a move that according to York Aviation could cost the UK economy £2.1 billion in GDP and put nearly 20,000 jobs at risk.

Earlier this month, a cross-government Global Travel Taskforce was created in response to the impact of specific challenges to international air travel posed by Covid-19, including (but not limited to) considering how a testing regime for international arrivals could be implemented.

The AOA points to the urgency of introducing a robust testing system, but states this alone will be ‘insufficient’ without necessary financial support for the aviation sector.

Karen Dee, Chief Executive at AOA said: “UK airports have done everything in their power to weather the storm and have done so without the specific government support afforded to other sectors.

“That they are losing £83 million per week must serve as a wakeup call to the government and lead to the delivery of the promised Aviation Recovery Package of support.

“As we approach the challenging winter months the government must support the industry through the introduction of business rates relief for airports in England and Wales, continuation of VAT-free sales airside, funding for the CAA, a temporary suspension of APD and a longer-term package of financial support that promotes, protects and enhances our global connectivity as our sector looks towards the long journey to recovery.

“Damage now to Britain’s connectivity will take years to repair, harming all our ambitions for the UK in the global marketplace.

“Last week’s commitment to testing was a welcome first step, but we need the government to understand the brutal reality facing UK airports. These projections show that the time for deliberation has passed, and it is essential that they deliver this support and deliver it now.”

CALLS FOR MORE TARGETED SUPPORT

The AOA have criticised a government support package for aviation claimed to be worth £8.5 billion on the basis it comprises ‘economy-wide measures such as the job retention scheme that are now being withdrawn’ plus support for aerospace rather than measures targeted specifically at UK airports and aviation.

According to an answer provided in parliament last month, this is made up of the Covid Credit Financing Facility (£2.7bn), expected UK Export Finance support for aerospace and its aviation customers (£5.5bn) and R&D support for aerospace (over £500m across three years).

In response, the Department for Transport (DFT) says aviation can draw on an ‘unprecedented package of economic measures’, including a Bank of England scheme for firms to raise capital; two business interruption loan guarantee schemes for different sizes of business; ‘Time to Pay’ flexibilities with tax bills; financial support for employees and automatic VAT deferrals; in addition to the six month Jobs Support Scheme after the end of the furlough scheme at the end of October.

A spokesperson told TRBusiness: “While protecting public health remains our priority, we recognise the challenging times facing the aviation sector, which is why we have acted quickly to provide the industry with an unprecedented package of support.

“The Global Travel Taskforce and the Recovery and Engagement Unit are now working at pace, with industry, to develop measures as quickly as possible to protect air connectivity and support the long-term future of the travel sector.”