COVID-19 continues to weigh heavily on travel demand with Heathrow’s passenger numbers down by over 95% compared to the start of last year’s summer season. Since the beginning of this pandemic traffic and passenger numbers typically have reduced by 99% from 2019 levels, estimates put UK airport lost revenue for 2020 at almost £4 billion so far and up to 110,000 jobs are now at risk at UK airports and their supply chains.
The aviation industry – and the sectors which rely on us – need swift action from Government to enable aircraft to get back in the skies to support the UK’s economic recovery. The proposal for a temporary, 12-month APD holiday – as outlined in the report released by Airlines UK this week is exactly the type of decisive action that is needed to protect thousands of jobs, lower airfares for passengers and drive the tourism and trade that will restart Britain’s economic engine. We urge the Government to move forward with it at pace.
Looking ahead to recovery
While many sectors are able to begin their recovery, the Government’s quarantine policy for international arrivals has prolonged the impact on aviation. Further review of the policy is now more critical than ever, as strategically important long-haul flights remain grounded and more jobs continue to be put at risk in an industry crucial to underpinning the recovery of the UK economy.
The introduction of Travel Corridors earlier this month has provided some hope of an initial recovery and is a welcome first step. We now want to work with Government and industry to develop solutions which enable critical trading routes to restart and the UK economy to re-open. A key part of enabling trading routes with countries still subject to quarantine – or safeguarding connections to those countries which are now exempt – is to develop passenger testing solutions. This would form part of a Common International Standard for health screening at airports and the Government has the opportunity to take a global lead in setting this standard with international partners which are key to rebuilding our economy.
Heathrow stands ready to play its part by planning to host the UK’s first pilot ‘Test-on-Arrival’ procedure from Collinson and Swissport. The pilot, could allow COVID-negative passengers arriving from higher-risk countries to enter the country without the need to quarantine, should the Government grant an exemption for this pilot.
We are also trialling a number of new technologies and processes – including temperature screening and UV sanitation to quickly and efficiently disinfect key touchpoints in the passenger journey. Heathrow is undertaking trials so we can share learnings with Government and industry which could both help the aviation industry recover quicker and ensure the airport remains COVID-secure to keep colleagues and passengers safe as air travel resumes.
Building Back Better – leading a green recovery
Aviation in the UK is not just another economic sector. It is the cornerstone of the UK economy. It is the third largest aviation sector in the world, supporting 4.5% of UK GDP. As such, the UK aviation sector will be fundamental to the economic recovery from the COVID-19 pandemic as we begin to re-open our doors and borders. We need to return to normality as soon as possible, but we want to come back even stronger and do it in a way that protects both jobs and the environment – to ‘build back better’ – and support the commitment to decarbonise UK aviation and reach net-zero emissions by 2050.
Heathrow will continue to prioritise decarbonisation of the aviation sector in a way that protects and creates jobs, fuels a green economic recovery and future proofs UK aviation for decades to come.
Key measures to delivering this should include investment in cleaner aircraft and engine technology, and an airspace modernisation programme – but also importantly, investment in sustainable aviation fuels (SAFs). We believe that £500m of Government investment over five years (and matched by industry) would support flagship commercial SAF plants across the UK, as well as a UK centre of excellence.
Decarbonising aviation provides an opportunity for the UK to take a lead in this important global sector, and the sector is ready to work with Government to make this happen. Decisive action today will support not only a sustainable and world-leading UK aviation sector but fuel a great British green recovery. That is why we are pleased to welcome and take part in the Jet Zero Council, with our CEO, John Holland-Kaye attending the first meeting which took place this week.
A Heathrow ‘Associated Freeport’ – connecting the UK’s regions to international trade
Heathrow responded to the recent Government consultation on Freeports. We believe Freeports have the potential to connect regions together, drive new innovations and promote regeneration and job creation across the UK. Freeports at airports have already been implemented across the world and can be applied here after the EU Exit Transition period.
Heathrow’s consultation response set out our interest in seeking ‘Associated Freeport’ status. As the UK’s only hub airport, Heathrow can harness its unique position for the benefit of the whole country, acting as the centre in a ‘hub and spoke’ model of Freeports.
Connecting other UK Freeports to Heathrow means connecting businesses across the country to global markets with streamlined customs processes, providing a boost to nascent industries that are producing high value goods and creating jobs in areas which could capitalise on the economic opportunity which Freeports represent.
As the UK’s largest port by value we know well the opportunities airports bring to local and regional businesses, communities and people. In 2019, the airport accounted for 40% of UK non-EU exports by value, and exports worth more than £140bn travelled via Heathrow. This is more than double the UK’s second largest port by value, Southampton. In March alone, during the height of the pandemic, Heathrow’s importance was further underlined, with 33% of the UK’s critical equipment and PPE to fight COVID-19 by value arriving through the airport.
As the country recovers from COVID-19 and looks ahead to a future outside the EU, the UK has a great chance to develop creative policy solutions which will underpin the long term economic and social recovery. This is exactly what needs to happen if the UK is truly going to level up and spread opportunity and prosperity across the country.
At this early stage in the process, the Government still has more detail to set out on their vision and objectives for Freeports. We feel that clear guidance and information is needed for businesses to progress with their plans. However, we are keen to contribute our views and expertise, and would welcome the opportunity to discuss this further with the Government and stakeholders.