Coronavirus: UK airports predict £4bn in lost revenue this year

Tom Belger
·Finance and policy reporter
·3 min read
Passengers wearing face masks arrive on the first day of new rules that people arriving in Britain from overseas will have to quarantine themselves for 14 days to help stop the spread of coronavirus, at Heathrow Airport in London, Monday, June 8, 2020. The British government has said that anyone caught not complying with the quarantine will face a fine. (AP Photo/Matt Dunham)
Passengers at Heathrow airport as UK airport chiefs warn on lost revenues. Photo: Matt Dunham/AP

UK airports are set to lose at least £4bn ($5.1bn) in revenue this year as the coronavirus has hammered air travel, according to industry chiefs.

Karen Dee, chief executive of the Airport Operators Association (AOA), said demand would not reach pre-pandemic levels for a “considerable period,” despite a gradual easing of travel restrictions worldwide.

Airport companies are calling for more UK government support, including a suspension of air passenger duty, wage subsidies after the furlough scheme ends in October, and relief from business rates similar to hospitality and retail firms.

Transport secretary Grant Shapps would not be drawn on whether the government has considered an air passenger duty holiday to help airlines when asked on Wednesday. “I can’t get into pre-empting Budget and other measures, so I can’t confirm that at all, I’m afraid,” he told Sky News.

New analysis by the AOA suggests UK airports lost more than £150m a day during the first four months of the pandemic. Dee described the period as “the worst four months in the history of commercial aviation.”

Revenue was down just under £2bn in total compared to the previous year, as passenger numbers fell by as much as 99%.

READ MORE: Airport luggage handler Swissport says 4,500 jobs at risk

“Such losses undermines the ability of airport business to power the future prosperity of their local economies, forgoing crucial investment projects and, unfortunately, causing job losses,” the trade body said in a press release.

Dee said passenger numbers had begun to pick up, but airports would continue to face pressures “unimaginable six months ago.” She said the industry was important to prime minister Boris Johnson’s “levelling up” agenda and ambition to make Britain a “global trading nation.”

Many airlines have been lobbying for the government to lift its two-week quarantine policy for new arrivals in the UK for more countries.

Shapps told Sky News the government would make more announcements on international travel following a fresh review of the policy next week. “I will be talking more about the way forward on things like international travel corridors then. But now, each week actually, we are reviewing and, where required, updating the list of countries it’s safe to travel to.”

The aviation industry has seen a wave of job cuts announced in recent months amid bleak forecasts for recovery in demand. British Airways (IAG.L) and EasyJet (EZJ.L) are among the airlines announcing thousands of jobs were at risk. Airport luggage handler Swissport said 4,500 jobs were at risk last month, and plane engine maker Rolls-Royce (RR.L) is looking to axe 9,000 roles.

A Treasury spokesperson said: “We’ve provided a generous package of support for businesses which the aviation sector can draw upon. This includes the furlough scheme - which has helped more than a million employers – access to finance through the COVID corporate financing facility, VAT deferrals, and flexibilities around the payment of tax bills, including air passenger duty.

“Earlier this month we set out the second part of our support for the economy, giving businesses the confidence to retain and hire, including supporting jobs with a £1,000 Coronavirus job retention bonus for employers.”