Meeting of the Parliament (Hybrid) 16 September 2020
No one doubts the importance of aviation as an industry, and the debate is welcome, given the number of emails that I have received from very worried employees. Because of our geographic position as an island, we cannot just dismiss aviation; we need to cross the seas, and we need to cross them fast in many cases. John Holland-Kaye, the chief executive of Heathrow airport, was right to note that the aviation industry impacts not only on visible issues such as tourism but on the manufacturing industry through the necessity of long-haul flights, with many businesses relying on those flights for their just-in-time supply chains. He notes:
“Unless you get those flights moving again ... we will not be able to get the UK economy rebooted.”
In my opinion, he is quite right. Not only do 80 per cent of inbound visitors reach the UK by air, but air freight accounts for 40 per cent of trade by value.
It is essential for the economy that the aviation industry gets back on its feet, and the best way to achieve that is for planes to cross our skies again. That would not only protect cabin crews; it would help to retain airport staff as well as those in industries that are dependent on air travel. Airports need customers, otherwise they are left paying expensive overheads with little or no income. By June of this year, Heathrow airport reported that it was losing £200 million a month, and Edinburgh airport has advised that 80 per cent of its costs are fixed overheads—costs that accrue no matter how many flights take to the air. I have no doubt that the Scottish Government must also be concerned about the fixed costs of running airports without passengers, given the fact that the Scottish ministers own and operate 11 airports that are not even paying business rates. That makes increasing traffic in airports not simply desirable but a necessity.
Indeed, that is something that Gordon Dewar, the chief executive of Edinburgh airport, highlighted succinctly in a recent open letter to the Cabinet Secretary for Justice. Mr Dewar noted that a
“dual approach with balanced attention given to health and prosperity”
is the only way forward, citing the need for a robust testing regime and calling the Scottish Government’s quarantine policy
“a travel ban in all but name”.
As he says, that is simply not a sustainable approach, and I believe that he is quite correct.
Airports and airlines need customers, and commerce is the best remedy that we have available. However, we need an effective testing regime if we are going to tackle Covid continuously. Quarantine does not work, because, for most people, 14 days in one place requires 14 days’ supply of food, and several people have informed me that the places that they have gone to quarantine have told them that they are not supplying meals and that they will have to go out to get them. I leave members to consider what that means for people.
For the sustainability of the sector and for the sake of the taxpayer, simply bailing out aviation companies does not present a long-term solution. We have seen that with firms such as Flybe. Propping up failing businesses is not the way forward; sometimes, market forces should be allowed to take their course. However, financial support is necessary at present, and measures such as the Scottish Government’s moves to waive business rates for airports are welcome. As the Covid-19 pandemic develops, it looks very much like the possibility of aviation returning to a state of normalcy by spring next year is highly unlikely. Accordingly, I ask the Scottish Government to conduct a study into the feasibility of waiving business rates for airports for another six months, if necessary.
As in countless sectors across Britain, the UK Government’s job retention scheme has sought to protect jobs in aviation, and other helpful measures—including waiving air traffic control charges for 14 months, VAT deferrals, the Covid-19 corporate financing facility, the coronavirus business interruption loan scheme and the introduction of a payment plan facility for the Civil Aviation Authority to cover the payment of annual charges—have been generous. As some members have said, companies such as Ryanair and easyJet have accessed £600 million each, while BA and Wizz Air have received £300 million apiece. Sadly, though, that does not appear to be enough. I suggest that both Governments consider introducing holistic measures such as offering tailored financial support to tourism and travel businesses that are reliant on air travel for their customers. That trade is worth £11 billion to Scotland’s economy.