Airport capacity at risk if government doesn’t give assistance for fixed costs
Prospect has warned that airport capacity will be put at risk if the government doesn’t give airports financial assistance with their fixed costs – particularly air traffic control.
The union has submitted a proposal to Department for Transport setting out how it can maintain ATC capacity and ensure the industry’s ability to recover from the current crisis.
The proposal details the current challenges facing the UK’s airports – which are having to sustain key services against a background of a collapse in their income.
Airlines have seen a 90% fall in air traffic which has been devastating for the aviation industry which is directly worth more than £22bn to the UK economy and provides 230k jobs. When indirect, aerospace and support jobs are taken into account it is estimated to provide closer to 1m jobs.
Airports underpin the whole industry and are vital infrastructure – capacity must be retained if the industry and the economy as a whole are to rebound when the current crisis is over.
Airports by their very nature are fixed infrastructure assets which require certain elements to operate, eg fire and rescue services, air traffic control, security and airfield operations. They are required irrespective of traffic levels.
Airports’ income comes predominantly from airlines and as a result of footfall, both of which have been hit hard. The main source of income for most airports are retail and car parking.
As a result of airports’ cashflow problems, air traffic services are coming under significant pressure. The costs are fixed and do not vary significantly with the volume of aircraft movements and certainly not with the number of passengers. For this reason contracts are fixed-price.
Airport operating companies are now seeking to reduce their payments for this service which presents huge risks as air traffic staff would have to be cut. But, once cut, ATC cannot simply be restarted or ramped-up.
In order to ensure continuity of service, provide relief to UK airports with respect to their fixed costs and to ensure that services can be maintained at a level to allow the industry to recover, Prospect proposes that short term financial assistance for the provision of air traffic services at UK airports is facilitated by the UK Government.
Prospect’s proposals sets out how this could be implemented, and how it could be paid for. The proposal accepts that where there is a full recovery of the industry government should be able to recoup the costs.
Prospect National Secretary for Aviation Steve Jary said:
“When people think about aviation they think airlines but the most important part of the industry is airports. Without airports there is no industry – it is vital the government takes steps to support them and the integrity of the service they provide. The government has to see airports as key national and regional infrastructure – essential to its vision of the UK as a trading nation and essential to the rebalancing of the economy.
“Air traffic control is not something that can just be switched on and off. If the government wants the economy to rebound then it needs to take steps to secure the future capacity of the aviation industry – that means covering fixed costs. Air traffic control and fire services are just two of the essential services that fall into the fixed cost category.
“In the short-term the safety of air travel is under threat, but also the long-term survival of the industry.”
More information:
Prospect: ATC and Covid-19 – Capacity Retention Scheme (PDF download)
