FTI Consulting Public Affairs Snapshot – Turbulent skies: After a torrid year for the UK aviation sector, what next?Download a PDF of this article
The Covid-19 pandemic has reached into all areas of the UK and world economy. Few industries, however, have been affected as significantly as aviation. It was one of the first industries affected by the pandemic, as national governments closed international borders to prevent non-essential travel and problems have come thick and fast over the following year. In addition to the impact of coronavirus, this snapshot examines the multitude of issues shaping the aviation industry in the UK and what to look out for in the coming year.
In the UK, the Foreign and Commonwealth Office advised British nationals on 17 March 2020 against all non-essential global travel. Tens of thousands of holidaymakers and business travellers had their flights cancelled overnight. Around the world thousands of planes were grounded and left idle on the tarmac.
The resultant drastic fall in air travel—a 97% reduction in passenger flights compared to the previous year—has been devastating for the aviation industry, with estimates that the sector in the UK lost over £20 billion in revenue in 2020. The sector is of huge strategic and economic importance to UK PLC. Prior to the emergence of the pandemic, the UK had the largest aviation network in Europe and the third largest in the world, that contributed £22 billion to the UK economy, along with over 230,000 direct jobs.
After a bruising 2020, and to add insult to injury, it was announced in mid January that travel corridors were to be indefinitely suspended as the UK tried to limit the spread of new mutations of Covid-19. This in effect closed the travel industry and removed the few remaining revenue streams still in existence for the aviation supply chain.