finance

Regional airports fear for the future as Covid-19 grounds flights 


The UK government’s offer of “last resort” support to the aviation industry undermines its commitment to regional connectivity, according to airport groups who say they are suffering heavily from a sharp drop in passenger numbers because of the coronavirus pandemic.

Rishi Sunak, the chancellor, last week warned airlines and airports that companies would only receive “bespoke” support from the government after all other financing options have been explored. 

“The suggestion that government funding is only a last resort is not going to help regional areas sustain their connectivity or objectives that we still hopefully think are important for the country,” said Neil Pakey, chair of the Regional and Business Airports Group, an association for airports with fewer than 3m annual passengers.

As smaller airports grapple with the impact of the UK-wide lockdown and international travel bans on passenger numbers, a handful including Teesside in the north east and Newquay in the south west have already shut their doors, remaining open only for emergency services.

Mr Pakey said there is an uneven playing field between small and large airports as staff wages and business rates make up a bigger proportion of costs for regional airports. He said there are “sure to be casualties” if support is focused on larger airports which may be deemed more important.

“It’s a risk for us,” added Mr Pakey. “Instead of narrowing the gap between the importance of larger airports compared to smaller ones, it’ll widen it.”

The aviation industry has been at the sharp end of economic disruption unleashed by coronavirus as countries have banned non-essential passenger travel and freight volumes have declined as business activity grinds to a near halt. Trade body ACI Europe forecasts that the continent’s airports will see 700m fewer passengers in 2020, a decrease of 28 per cent compared with a “business as usual scenario”.

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Cash-strapped regional airports are crucial for connecting UK cities and attracting investment to areas beyond the wealthy south east. The government’s election pledge to “level up” the UK’s underperforming areas came under scrutiny during the collapse of regional airline Flybe, a carrier which airports including Southampton and Belfast depended heavily on.

The rapid onset of coronavirus has added to airports’ woes and further tests the government’s commitment to levelling up. 

“If the government is serious about its levelling up agenda, airports will be key,” said Karen Dee, chief executive of the Airport Operators Association. “The regional airports will probably have fewer airlines operating from them and will have felt the effects more quickly.”

Ms Dee pointed to the Scottish government’s 100 per cent relief on business rates which applies to airports and questioned why the UK government had not followed suit: “That’s another big chunk of cash that airports have to pay.”

A government spokesperson said: “We are continuing to work closely with the sector and are willing to consider the situation of individual firms, so long as all other government schemes have been explored and all commercial options exhausted, including raising capital from existing investors.”



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