UK Aviation; Brexit, Covid - what next ?
First, back in 2016, there was Brexit. Then in early 2020, there was Covid-19. Now we have a combination of both. It is becoming evident that neither is likely to produce anything positive for the UK aviation industry.
Firstly let's look at Brexit and a few key aviation-related points.
Leaving EASA
AI Online reported in May 2020 that "On March 7, the UK government confirmed that it will withdraw from EASA on December 31, provoking widespread concern in the aviation industry about the disruption this could cause. It argued that membership of EASA is incompatible with the UK's independent status, even though other non-EU states, including Switzerland, have remained long-standing members of the agency".
This prompts two obvious questions; are the UK CAA ready, appropriately funded, resourced and skilled to take over the reins from EASA?
Once it's finally clear what is going to happen, whenever that may be and whatever that means, will the industry have sufficient time to ready itself?
In reality, we probably all know the answer to these questions already.
Trade Deals
Over the last few years, the UK government appears have developed a nice line in overly optimistic soundbites reassuring us all that everything will be alright, that we have' world-class' and 'oven-ready' systems and that countries are 'queuing up' to negotiate trade deals, but is that really the case and what does this mean for the aviation sector?
According to the Centre for Aviation (CAPA); "Through the European Common Aviation Area (ECAA, overseen by EASA), UK flights have access to 44 countries, accounting for about 85% of all of Britain's international air traffic." Additionally, 60% of UK trade is with the EU and countries with EU trade agreements. As of July 2020, the BBC reported that the UK has negotiated trade agreements just 17 countries, the largest of which is Switzerland where total trade is worth £32bn.
Since the UK Government didn't seek an extension to the transition period by the 31st July deadline, it now appears that UK businesses are sleepwalking into a post Brexit world with much to do (if only they knew what it was they should do) and precious little time to do anything meaningful.
EasyJet Europe
In 2017 easyJet announced its intention to secure an Austrian AOC thereby creating easyJet Europe. The decision was a measure designed to protect their intra EU business but primarily driven by the lack of certainty provided by the UK government. As of August 2020, easyJet had 139 Austrian registered aircraft (41% of their total fleet) most, if not all of them have been or would have been UK registered. The associated tax revenues now go to the Austrian government.
Moving onto Covid.
Pre Covid, Covid and now
If Brexit wasn't enough for the industry to contend with, along comes Covid-19. In the past three years, before Covid, we've seen Monarch, Thomas Cook and then, in March 2020, Flybe all fail. The pandemic then took a baseball bat to what was left of the rest of the industry and decimated it with around 25,000 job losses so far with, probably, more to come through further airline and/or supply chain failures.
UK government assistance
The overall government and industry reaction to the sector has been indifferent with little in the way of coordinated effort to prop the industry up and little in the form of a roadmap of good ideas going forward. Airlines, Ground Service Providers and the rest of the supply chain all continue to struggle.
Covid outlook
Many of the forecasts are guesswork, and at this point, it's fair to say that we simply don't know what will happen. This may be partly because of Covid and partly because of Brexit. Today easyJet announced a 40% reduction in capacity and Ryanair 20% for the forthcoming period - significantly down on what they had initially planned.
Any small or large business owner will tell you that two of the most critical elements that any business needs is certainty (as much as it's possible to provide) and a plan. Five years ago, the future looked bright and as certain as could ever be for the aviation industry.
Now, with 113 days to go (as I write this) until the end of the transition period and a whopping 1539 days since the referendum, it doesn't take a genius to work out that the future currently looks neither certain nor bright. It begs the question of how could any responsible government be so irresponsible and waste so much time?
Depressing? Yes. A travesty? Yes.
All businesses and industry need a plan, so where's the plan? You know, the one that points the sector into a more certain, prosperous and hopeful future. I'm afraid, at this moment, it just doesn't exist.