Government intervention in the airline industry has been almost inevitable since it became clear that the coronavirus (COVID-19) was more than a short-lived phenomenon. Following the news that easyJet has grounded its entire fleet, the need for support has crystalized;
Nick Wyatt, Head of R&A and Travel & Tourism at GlobalData, a leading data and analytics company, offers his view on the situation:
“The fact that an airline of easyJet’s size has been forced to ground its entire fleet shows just how acute the need for help has become in the UK aviation industry.
“Chancellor Rishi Sunak has so far stood his ground and refused to offer up government cash as a bailout service. In some ways, this is laudable, but it is no longer practical. The country’s aviation sector needs help – and fast.
“This is not just about airlines. Airports are also suffering – something that has been largely overlooked. If flights are not running, there is precious little footfall in terminals. This means revenues are hit for retailers, which in turn could potentially lead to issues for airports if these retailers can’t pay rent. It’s also about jobs and a lack of action for aviation does not fit the government’s overall strategy. It’s puzzling.
“Airports are remaining open to service cargo and facilitate emergency repatriation flights. Operating costs are high. The same is true for airlines. They may save on staff and fuel, but expensive aircraft leases and parking fees must still be paid.
“A group of MPs has written to the Chancellor urging him to take action. Industry heavyweight easyJet’s announcement today should send a clear sign that the government must step in to help an industry that contributes a great deal to the economy and allows the UK to compete on a global stage.”
