Eurocontrol, the organisation that manages air navigation
charges across Europe, has introduced measures that will see airlines able to temporarily
defer the payment of charges during the coronavirus pandemic, which it says
could save them billions of euro.
Under the measures announced last week, carriers will be
able to defer the payment of charges for air navigation services in UK and
European airspace for the months of February to May 2020 for up to 14 months.
According to the UK government, which holds a 10 per cent share
in the vote for any such action passed by Eurocontrol, the country’s ten largest
airlines would have been expected to pay a total of £47.2 million for flights
in European airspace in February. Eurocontrol estimates that European airlines
could defer up to €1.1 billion in route charges thanks to the new measures.
Eamonn Brennan, director general of Eurocontrol, commented: “I
am really delighted that our member states have approved this essential
measure. It will provide much-needed liquidity support. Many airlines contacted
Eurocontrol to confirm that they would not be in a position to facilitate their
next payments. With traffic down 90 per cent, our member states have clearly
recognised the shared challenge. This payment deferral will ease the immediate burden
on airlines and it provides certainty on financial planning to both airlines
and the air navigation service providers on when payments will be made after
the crisis has abated.”
UK transport secretary Grant Shapps said: “This is a very
difficult time for airlines, but they continue to provide a vital service
bringing UK citizens home and transporting vital medical supplies. Deferring
these charges will further help airlines, on top of the unprecedented package
of economic measures recently announced by the chancellor to support businesses
through this challenging period.”
While airlines have not been considered for a targeted financial
relief package by the UK government, those based in the country have been able
to furlough staff under the coronavirus job retention scheme, under which
employees are paid up to 80 per cent of their wages up to a maximum of £2,500
per month through a government grant until the end of May. Carriers can also
apply for fast-track loans made available through the Bank of England and HM
Treasury, with Easyjet recently announcing it has secured £600 million in
funding through the scheme.
However, organisations representing the UK’s aviation
industry have said the measures are not enough.
Responding to the air navigation charges deferral
announcement, Tim Alderslade, CEO of Airlines UK, said: “This is welcome news
and we thank the government for voting in favour for the proposals. Whilst it
will help with short-term liquidity, it only refers to ATC [air traffic
control] charges for February to May, a period in which global aviation has
virtually ground to a halt and charges for airlines would’ve been substantially
reduced anyway. Further measures, including extending this deferral or ideally
waiving ATC charges for the whole year, and doing likewise with other costs
like CAA [Civil Aviation Authority] charges, will also be needed to help get
airlines through this unprecedented downturn.”
Airlines UK, alongside industry groups the Airport Operators
Association and ADS Group, which represents aerospace companies, have joined
the wider business community in calling on the UK government to extend its job
retention scheme beyond the end of May so companies can make decisions this
week about whether they will need to make redundancies when the scheme ends.
They are also calling for business tax rates relief already
given to firms in the retail and hospitality sectors to be extended to aviation
firms and for the government to work with other countries to ensure travel
restrictions are lifted in a coordinated manner to avoid confusion among
customers.