Unfortunately, our events programme remains suspended and last week we missed the April lunch, where we would have been joined by guest speaker John Holland-Kaye, CEO Heathrow Airport. I know many of you were particularly looking forward to hearing from John and rest-assured, he will join us at a future date.
Stock markets have collapsed, businesses have had to close and public life is restricted due to the Covid-19 virus. It’s a humanitarian crisis and there are drastic global restrictions in place to minimise the spread. They may vary from continent to continent, but one thing they have caused already: A large part of commercial air traffic has come to a standstill. Travel bans and plummeting demand have darkened the future of the aviation industry. Never before has it been hit by an incident of this magnitude, resulting in almost no passenger business.
Whilst John was unable to address Club members and guests last week, he has provided an insight into the current situation, which you can read below:
‘Prior to this outbreak, our sector thrived. Many of us had enjoyed record breaking years. Airlines prepared to launch new routes to untapped markets, that would take British goods to more parts of the world and bring back tourists and inward investment to our beautiful isles. Many airports were progressing growth plans, be it in existing terminal buildings, emergency runways or building new ones.
This feels like a lifetime away, yet it was only a few months. It was only twelve weeks ago our industry felt the first warning ripples of the initial outbreak in China and we started working with health officials on enhanced monitoring measures. As the outbreak became a pandemic, travel bans and lock downs became the norm, crippling trade and tourism and mothballing planes and terminals.
While some commentators have questioned why airports remain open, there has been increasing realisation of the crucial role aviation plays in the fight against Covid-19.
I often talk about the critical economic role Heathrow plays as the UK’s biggest port. Today, many of us are working around the clock to keep vital supply lines open, as ventilators and precious PPE equipment land at airports across the country supporting the battle against this pandemic. If we were not open, tens of thousands of British citizens would be stranded across the world without the support of friends and family or even access to medical help. So let us pay tribute to the hard working men and women of the aviation industry who have worked so hard on the front line to support the NHS and bring people home.
But even as we serve the nation, the aviation sector is facing real financial distress. Our revenues have disappeared, but our costs remain largely fixed. This is an existential threat to our supply chain, as well as all those who rely on aviation for their livelihoods. We will publicly support any business in our sector that needs Government help. It is vital that we emerge from this crisis with a vibrant and competitive aviation industry.
The government can do more to help. We have been pushing for deferral of Business Rates, which represent over 10% of our costs, and currently more than our revenues. Only in Scotland has the government waived unaffordable rates to support aviation. Now we need a level playing field.
Whilst we are consumed by this crisis, it is important that we think about how we can accelerate the recovery, and the critical issue will be the reopening of borders to international travellers, without the need for quarantine. The crisis came on so rapidly that each country set its own health screening standards, with little coordination. Rightly or wrongly, those that require temperature checks, are perceived as being safer than others, such as the UK.
As we come out of this crisis, each country will be cautious about reopening their borders to avoid the risk of reinfection. Until there is a cure or a vaccination, it is likely that travel between countries will only happen if each considers the other to be low risk, and to have similar high standards. So the aviation industry needs a common biosecurity standard for air travel, just as there is for airport security.
And the UK needs to be at forefront of this. We are an island nation and a trading nation, which is why we have one of the biggest aviation sectors in the world. Millions of jobs in tourism, education, retail and exports rely on aviation. Unless we can make it safe for people to visit Britain, the UK economy will be held back. Let’s work together with the international aviation sector and governments to define and agree a common biosecurity standard.
Leaving the middle seat empty on planes cannot be a long term solution. It would take out a third of the world’s aviation capacity, drive up the cost of travel for marginal safety improvement and increase every passenger’s carbon footprint.
Maybe it is better that, as with airport security, the test for whether someone is safe to fly should take place at the entrance to the airport or at airport security, so that we can minimise the need for social distancing on the plane or at the gate. If there is a common international standard, we will know that any arriving passenger will be low risk and we can minimise the need social distancing in immigration or baggage reclaim also. We have made good progress on automating the passenger journey, but the final steps have been held up by bureaucracy. Now is the time to push ahead so that we minimise contact between aviation workers and passengers in check in, bag drop, security, boarding and immigration.
If we can get this right, we will be more resilient to deal with any future pandemic. And the aviation sector and all the industries that rely on us, can fly high into the future.’ John Holland-Kaye, CEO Heathrow Airport