Coronavirus: Airports hit back at Rishi Sunak over aviation rescue u-turn
The UK’s airports have hit back at chancellor Rishi Sunak’s choice to “row back on [his] vital decision to stand by the aviation sector”, saying that the chancellor seems to have “little recognition” of the fact that airports have different operating models to airlines.
On Tuesday Sunak said that state aid would only be given to members of the aviation sector as “a last resort” after they had exhausted all other existing means of raising cash.
The move was seen as something of a u-turn by the industry, as Sunak had the week before signalled that a special package of measures for airlines and airports was on its way.
Now, in a letter to the chancellor seen by City A.M., Airport Operators’ Association chairwoman Ruby McGregor-Smith has said that the economy-wide measures announced by the chancellor, whilst suitable for airlines, do not help airports.
She wrote that the employment retention scheme, that requires workers to be furloughed in order to qualify for 80 per cent of their wages to be covered, is “not workable for an airport that needs at least a skeleton staff to keep the airport operational .
“The smaller the airport, the higher the proportion of staff that need to stay in the job to keep the airport open”.
Instead, she wrote, the government should increase the flexibility of the scheme in order to cover staff who have to be kept on to run services.
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She added that deferring Air Passenger Duty would have no impact on airports, which instead have asked the deferral of other taxes such as corporation tax and PAYE.
She also said that the government’s £330bn coronavirus loan facility “will not be open to the majority of UK airports because they are not rated investment grade or equivalent”.
However, Sunak has already said that he is looking into resolving this uncertainty, which has also been raised by airlines.
McGregor also asked for a series of other measures to be taken, including deferring upcoming security and modernisation deadlines and relaxing retraining and work restrictions on staff returning after being furloughed.
She said that it was “vital” for the UK economy that airports remained open, and that without state assistance some would be forced to close.
London City airport has already suspended all flights for the foreseeable future, whilst Southend will only now be open for three days a week.
The letter comes hot on the heels of one from Airlines UK asking the chancellor to defer air passenger duty and air traffic control fees in order to support the industry.