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Published on Wednesday, November 4, 2020

Airlines UK calls on Chancellor to provide more support


Airlines UK has written to the Chancellor Rishi Sunak asking for a package of measures to see its members through the winter, including government subsidised Covid tests for passengers and a 12-month suspension of Air Passenger Duty.

In the letter, the body which represents all UK carriers, also called for an extension of the furlough scheme for the aviation sector until the end of the winter season in March 2021 and additional government grants or loans at reasonable rates.

Airlines UK also wants an extension of the Covid Corporate Financing Facility and Covid business interruption loan timelines from the current 12 months and 36 months out to five years for both, plus government loans for airlines that were unable to access either, on pre-Covid commercial terms.
Since June, when Airlines UK last wrote to the Chancellor, 30,000 jobs have been lost or announced by UK airlines.

In the letter, Airlines UK said: "Aviation underpins substantial parts of the UK's hospitality sector, but also business and trade, with passenger aircraft carrying the majority of our air freight, which accounts for 40% of the UK's total trade by value. Each day that the UK is grounded does further and longer lasting damage.

"With the travel ban, airlines are now in effect closed businesses, and sadly in a much weaker position to face this period compared to the beginning of this crisis. Airlines are capital intensive operations with a high cost base beyond their employees, and were not able to meaningfully recover over the summer season, with key travel corridors closing on a weekly basis and major markets (not least the United States) never opening, and no testing policy in place to support a restart (unlike many of our European rivals).

"The Canary Islands, a vital market for the winter season for several UK airlines, was added as a travel corridor a little over a week ago, a positive prospect which has also now been reversed.

Consequently, the cross-economy support to date has been welcome and necessary to avert a collapse of airline businesses, who have nonetheless relied upon borrowing and other emergency measures to survive, including drawing down on their reserves and building up billions of pounds of debt that will need to be repaid, in a context where recovery is anticipated to take several years.

"Like the Prime Minister, we hold out hope that by Spring of next year the situation with the pandemic will be demonstrably improved, potentially via a vaccine but even without given wider developments, including in testing. We know that people continue to want to travel, despite the uncertainty, and will do so again.

However, the next period is now even more critical, and we call once again for a comprehensive support and recovery package for aviation, to see UK airlines through the winter and ensure that there is still a UK airlines sector in place to support a UK recovery into 2021."

Airlines UK also called for the government to subsidise private Covid testing 'to ensure cost is not a barrier to take-up once a UK test and release scheme is implemented'.

In addition, it wants the government to support a further deferral or cancellation of air navigation charges until at least spring 2021 and to help airlines to cover the cost of flying empty planes to bring UK citizens home following the implementation of the month-long travel ban this week.

"Of course, alongside economic support, we continue to urge steps to allow travel to safely return at meaningful levels whilst we are still living with the virus, and this must be through a UK testing regime that is underway by December, within a framework whose goal is rapid, pre-departure testing as the international standard," added the letter.

"We also support a review of the travel corridor system to make it more targeted and regionalised, and the removal of the global FCDO travel advice so that advice against non-essential travel is restricted only to destinations where risk to travellers is far higher than at home."

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