At such times of crisis, allocating resource and supporting businesses across the UK is crucial, and yet the chancellor has decided the UK’s airlines should fend for themselves. Only when those airlines are about to return the keys will the chancellor consider support. Some have suggested the airlines are fat cats full of cash, a few are, but most are rattling loose change in their pockets.
The last few weeks have, if nothing else, confirmed that the world is a small place. Repatriation flights, social media pleas for help to return home and an urgent and growing need to move medical supplies from China are sub-plots to the bigger Covid-19 crisis. Everyone appears to have suddenly mellowed, a greater perspective of what is right and wrong prevails and a greater sense of “moral fairness” seems to exist. Unless, of course, you happen to be a UK-based airline.
In the last week, the US administration (a loosely used phrase) responded to their airline industry seeking a US$50 billion support programme, and indications are that at least some of that will be forthcoming.
That some of the world’s most profitable airlines are seeking such levels of support says much about where we are. The Norwegian government has stepped in to save Norwegian, providing funding through to the end of 2020 through a mix of loans and convertible bonds. Alitalia, a carrier permanently in intensive care, has performed a miracle, with the Italian government effectively buying the airline back; so much for state aid rules.
In one sense, all of those actions support an industry that not only creates jobs, it creates economic wealth and important trading links which we will need to reignite in hopefully the next few months. But at this precise moment, individual countries taking individual decisions will create a very distorted playing field at the end of this Covid-19 crisis.
Choosing which airlines to support and which ones should be left to their own devices makes for an interesting discussion. If, as some major UK airline operators wanted, airlines should have to fend for themselves, then shouldn’t that be the same in every country? Such a decision would probably lead to further airline consolidation – something that was slowly beginning to happen.
Never before have we had such stark choices to make around how to allocate resources. The UK airlines simply want a level playing field and to be treated like others around the globe; some of whom are in dire straits. Rather than individual governments, agencies and others cutting their own deals of disruption, aviation support should be considered in a global rather than local context.
Iata – the airline industry needs you.
John Grant is partner at MIDAS Aviation
