A new report suggests that an emergency 12-month waiver of Air Passenger Duty could save 45 per cent of air routes that would be otherwise lost as a result of Covid-19.
The study – commissioned by industry association Airlines UK – suggests that without government intervention UK airports will lose around 600 routes in the immediate aftermath of the pandemic, a figure which will improve to being about 130 routes down by July 2021.
The association said that “the situation facing UK aviation remains highly precarious”, with passenger demand around 70 per cent down in August 2020 compared to August 2019.
But the report says that a 12-month period an APD waiver “could be game-changing, resulting in around 21 million additional passengers travelling through UK airports, equivalent to 12 per cent of baseline demand”.
“By July 2021, this would save some 45 per cent of routes that would otherwise have been lost, as well as potentially 8,000 jobs and some £7 billion in GVA (Gross Valued Added) – significantly greater than lost tax revenue”.
The association calls for an APD suspension to be announced no later than the autumn Budget, “to boost demand and enable the UK aviation industry to recover from the worst crisis in its history”.
Earlier this year Flybe reached a deal with the UK government understood to have deferred some of its outstanding APD payments, in the hope of averting bankruptcy. But less than two months later continued financial uncertainty and the onset of Covid-19 led to the collapse of the airline.
Commenting on the news Tim Alderslade, CEO of Airlines UK, said:
“UK airports are in danger of losing many valuable routes over the coming months unless the Government steps in with a support package for our sector – starting with an emergency APD waiver to get us through the winter and into the recovery.
“Some of these routes may never come back but APD relief will – by next July – save almost half that would otherwise be lost. The UK came into this crisis as the third best connected country in the world – it would be a tragedy if through Government inaction and neglect we needlessly forfeited this position to our closest rivals.”
