To ask Her Majesty’s Government what assessment they have made of the impact of COVID-19 on the airline sector; and what steps they are taking to support that sector.
My Lords, the Government recognise the challenging times facing the airline sector because of Covid-19. They have announced an unprecedented package of measures that the sector can draw upon, including a Bank of England scheme for firms to raise capital, time-to-pay flexibilities, and financial support for employees.
My Lords, given the parlous state of the airline industry and the fact that it is a major employer and driver of the economy and vital for delivering the project of global Britain, does my noble friend recognise that a further package of emergency measures, such as a 12-month waiver for air passenger duty and an extension of the furlough scheme for aviation, is vital to safeguard the sector’s future, to stimulate demand and to safeguard airline jobs?
My noble friend is quite right that it is important that we give all necessary support to the aviation sector. She mentioned two possible things that could be done. On air passenger duty, that is paid by passengers, of whom there are of course very few at the moment, but to the extent to which an airline might have had previous liabilities, they have been allowed to delay paying that under the Government’s time-to-pay arrangements. On furlough, that scheme is already in place until October.
My Lords, with the aviation industry not expecting demand to rise to pre-lockdown levels until 2023-24, and companies such as British Airways currently haemorrhaging nearly £30 million a day, does my noble friend agree that what the sector now needs above all is certainty? Does she accept that, while the proposed air bridges are welcome, each day’s delay in introducing them means significant and potentially crippling further losses to the industry, and that these air bridges need to be fully functional as a matter of urgency?
My noble friend will be aware that the Government are considering international travel corridors not just for air travel but all forms of international travel. We are looking at exemptions in respect of particular countries and particular routes. Many options are under consideration and there will be an announcement in due course.
My Lords, I declare my interest as co-chair of Peers for the Planet. The noble Baroness, Lady Penn, recently assured the House that climate change plays a central role in government decision-making. In any further support for the aviation industry, will the Government make sure that green strings are attached, as other countries such as France, Holland and Austria have recently done? In particular, will there be effectively enforced conditionality in areas including reducing emissions per passenger mile and developing and promoting more sustainable aviation fuels?
I would not like to prejudge what conditions would be put on any bespoke funding for any particular airline that might be under consideration, but I reassure the noble Baroness that we are investing in greener fuels for the aviation sector. On 12 June, the Secretary of State set up the Jet Zero Council, which consists of the Government, aviation and environmental groups to look at how we are going to achieve net zero emission flight as soon as possible.
My Lords, I declare an interest as vice-president of BALPA and as a member of the GMB. Given that the Government have rightly set up an aviation restart and recovery group, would it not be sensible for Ministers to ask all UK airlines and the aerospace sector to agree a moratorium on all major redundancy and restructuring plans until a clear strategy emerges from that group? Otherwise, they will risk losing vital skills and experience which will be essential in the new situation. When can we expect a clear strategy to emerge from that group?
The noble Lord is quite right that there is a tension at the moment in that the aviation sector is suffering and jobs are being lost and we must look to the future as quickly as possible. Certainly, the aviation sector is going to have to shrink—one hopes, temporarily. As the noble Lord pointed out, the restart, recovery and engagement unit within the Department for Transport is working at great speed with the sector and many others including the unions to come up with a recovery plan.
Airports have been very badly hit, but, unlike airlines, they have to continue to operate and employ staff although there are very few flights. All airports pay millions in business rates. There is one simple thing that the Government could do today to assist airports in England: follow the lead of Northern Ireland and Scotland and cancel business rates for the next year at least. Will the Minister agree to that?
Airports have been able to take advantage of a number of interventions by the Government. For example, 2,600 workers are currently on furlough under the Coronavirus Job Retention Scheme. As for business rates, while airports as a whole are not included in the business rates holiday, individual airports can discuss their circumstances with their relevant local authority.
My Lords, the Government should not allow a UK airline to be on the breadline. The airline sector contributes £40 billion to the UK economy and employs more than 600,000 people. Bearing in mind that 13 of our 15 most popular destinations have a lower R rate than we do, will the Government commit to reviewing the 14-day quarantine rule?
As I was able to confirm in an earlier answer, the Government are working at pace in looking at possible exemptions for particular countries or routes, not just for the aviation sector but for any other international travel sector.