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Tue, 11 August 2020

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Strategic support for airlines must mean long-term value for taxpayers

Strategic support for airlines must mean long-term value for taxpayers

Check in desks at Stansted Airport, Essex, as new quarantine rules for travellers arriving in the UK were introduced in early June | PA Images

4 min read

UK aviation is of great strategic importance to our place in the world. But from regional airports to large international airlines, ongoing support will be needed to weather the Covid crisis

Coronavirus has wreaked havoc on many sectors of our economy, but the aviation industry is bearing the brunt of the global pandemic. Travel restrictions introduced by many governments – as necessary as they may be – have led to unprecedented levels of flight cancellations and airport closures. Unlike previous crises, the sheer scale and speed of present one has been felt right across the industry. From low-cost airlines and regional airports to flag carriers and international hubs, few have been spared by the implications of the sudden decline in air travel. 

The UK Government have been swift to act, and many aspects of the business support package have helped to soften the blow for airlines and airports. A number of airlines have made use of the Job Retention Scheme to keep their staff on board while the Business Interruption Loan Schemes have been designed to ensure that companies of any size receive the support they need to get through this difficult time.

Should airlines or airports still find themselves in financial difficulty having exhausted all options, the transport secretary and the chancellor have confirmed that the Government are prepared to work with them to seek bespoke support as a last resort. This is a welcomed move, but any intervention will need to provide genuine, long-term value to taxpayers rather than short-term relief, which is already being provided by the current packages of support. 

As the UK and many other parts of the world continue on the path towards recovery, we will need creative thinking, strategic policymaking as well as closer partnership between government and industry to secure the future of our airlines and airports. 

If the Government are to fully realise the ambitions of ‘Global Britain’ in charting our recovery, it is vital that Britain remains well-connected to key markets across the globe. Our geographical position, which makes us an ideal gateway hub between Europe, Asia and North America, already gives larger airlines and airports that serve transcontinental routes an advantage.

Improving our regional airports will be key to redistributing some of the benefits away from London and the South East

If the whole country is to share in a post-Covid recovery, smaller carriers that operate domestic routes will want to see the Regional Air Connectivity review move forward at pace to ensure that all nations and regions of the UK have the connections local communities rely on and can also draw in visitors and investment opportunities that would otherwise go to regions with larger airports. They are also keen to continue engaging with the Government on Air Passenger Duty, which disproportionately affects domestic routes. Public Service Obligations will also play an important role in making certain that domestic connectivity remains protected at a time when many carriers are increasingly under pressure. 

Improving our regional airports will be key to redistributing some of the benefits away from London and the South East. They already promote economic cohesion across the country by facilitating rapid delivery of goods and people to different regions and generate a lower carbon footprint when compared to other major projects like HS2. But investment is needed in order to modernise existing infrastructure and increase capacity where required to meet the growing demand that we saw before the pandemic. 

To take full advantage of the resurgence in demand as restrictions are lifted this holiday season, having the right health and safety measures in place and communicating them clearly will help build passengers’ confidence to travel. It is also important to facilitate greater collaboration between the hospitality and tourism industry and the aviation industry – arguably the two sectors most affected by the pandemic – in order that to provide a safe and seamless experience for visitors. 

 

Steve Double is Conservative MP for St Austell and Newquay and acting chair of the APPG on General Aviation

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