The chief executives and chairs of Heathrow, Gatwick and Manchester airports and the Airport Operators Association (AOA) have warned that the coronavirus crisis may result in airports grinding to a halt within weeks without government support.
In a letter to the Prime Minister, the directors say that ‘traffic has fallen dramatically and is going down day by day’.
They continue: ‘The impact on the hundreds of thousands of people, either employed by us directly or through the SMEs and supply chains that serve our customers, is massive, real and happening at speed.
The chief executives and chairs of Heathrow, Gatwick and Manchester airports and the Airport Operators Association have warned that the coronavirus crisis may result in operations grinding to a halt without government support
‘These jobs have instantly been put at very real risk. We may have to close passenger facilities and halt operations.’
The letter pleas for the government to make Britain’s airports a top priority.
It says: ‘The decisions that are taken now will dictate the speed of the economic recovery when it comes and we will need to be at the heart of it. The Secretary of State has said he will be meeting the airlines.
‘We would ask he also urgently meets with us this week and that our needs are made an immediate priority for the “Economic and Business Response Committee” that the Chancellor is establishing today.’
The signatories of the letter are Stewart Wingate, CEO of Gatwick, and Sir David Higgins, Chair of Gatwick; John Holland-Kaye, CEO of Heathrow, and Lord Paul Deighton, Chair of Heathrow; Charlie Cornish, CEO of Manchester Airport, and Sir Adrian Montague, Chair of Manchester Airport, and Karen Dee, CEO of AOA, and Ruby McGregor-Smith, Chair of AOA.
In a separate AOA statement, Ms Dee said it was essential that airport businesses remain operating and are able to ‘weather this storm so that they can provide the connectivity which drives growth, employment and prosperity after the crisis has abated’.
She wrote: ‘Governments across the world are supporting their national aviation industries, as many parts of the global travel industry have come to a halt. As some airlines call on the UK Government to act similarly, we are clear that airports will shut down in weeks unless urgent action is taken to support the industry.
‘Due to the fixed costs of operating airports, the government will need to provide additional support.
‘The government must step in to see airports across the four home nations through the current crisis, and make an unequivocal commitment to doing whatever it takes to sustain the UK aviation industry.’
The letter, signed by the directors of Gatwick, Heathrow and Manchester airports as well as the CEO and Chair of the Airport Operators Association
Ms Dee released a list of things the Airport Operators Association, which represents over 50 of the UK’s biggest airports, believes the government should be doing immediately.
These are – be prepared to provide/organise emergency financing as a measure of last resort; require banks to temporarily not enforce financial performance-based banking covenants; suspend business rates and other government and local government rates and taxes on airports; deferral of payments of all VAT, corporation tax and other taxes for the duration of global flight restrictions; share the employment cost of airport staff laid off throughout the crisis; suspend regulatory costs on airports where possible; indefinitely postpone major increases to those regulatory costs, such as the Next Generation Security Checkpoint and provide relief from airport policing costs.
She added: ‘For the sake of the UK economy it is essential for the UK government to catch-up to its peers across the continent and provide support to the sector and the wider economy through financing, guarantees, grants and tax relief.
‘Finally, to help kickstart aviation again once the pandemic is retreating, the government should suspend Air Passenger Duty for six months.’
Meanwhile, Airports Council International (ACI) for Europe has warned that airports across the continent are bracing themselves for a ‘near-total collapse’ of traffic, connectivity and revenues.
In a letter to EU transport ministers and the EU commission, ACI Europe president Jost Lammers said that passenger traffic at EU/EEA/Swiss and UK airports decreased on average by 54 per cent last week, down from 24 per cent the preceding week.
Heathrow CEO John Holland-Kaye, left, and the CEO of Gatwick, Stewart Wingate, right, who both signed the letter from UK airports addressed to the Prime Minister
HOW UK AIRPORTS WANT THE GOVERNMENT TO HELP THEM
Be prepared to provide/organise emergency financing as a measure of last resort.
Require banks to temporarily not enforce financial performance-based banking covenants.
Suspend business rates and other government and local government rates and taxes on airports.
Deferral of payments of all VAT, corporation tax and other taxes for the duration of global flight restrictions.
Share the employment cost of airport staff laid off throughout the crisis.
Suspend regulatory costs on airports where possible.
Indefinitely postpone major increases to those regulatory costs, such as the Next Generation Security Checkpoint.
Provide relief from airport policing costs.
Source: Airport Operators Association
And now it estimates that these airports will collectively lose over 100 million passengers in the first quarter of this year, compared to a business as usual scenario.
He wrote: ‘The situation keeps worsening. As more countries both in the EU and beyond are adopting travel and flight bans, the proposal for a ban on entry into the Schengen area and with most European countries likely to go into lock-downs similar to Italy, airlines are further accelerating drastic capacity cuts and route cancellations to limit their financial exposure. Some are even shutting down all operations.
‘This means that Europe’s airports are now bracing for a near-total collapse of their traffic, connectivity and revenues. Indeed, the dramatic state of Italian airports gives an indication of what lies ahead for airports across the continent. Over the past days, passenger traffic at Italian airports went into a free-fall, decreasing by more than 90 per cent.
‘For airports, falling passenger traffic immediately translates into lost aeronautical and non-aeronautical revenues which they rely upon to operate, maintain and develop their facilities.
‘For now, ACI Europe’s revised forecast shows Europe’s airports losing €2 billion in revenue just in the first quarter of the year (before even factoring in the ban on entry into the Schengen area). These losses will further deepen in the coming months.
‘All European airports are currently rushing through extensive cost containment measures including unpaid leave for staff, temporary layoffs, corporate travel restrictions, ending consultancy and external contracts, closure of terminals where technically possible, reduction and suspension of investments.’
The warnings come amid 1,543 cases of coronavirus being diagnosed in the UK, with 55 deaths.