Aviation after Covid

May 5, 2020
Harold Goodwin

The Covid-19 epidemic is an urgent crisis, spread between countries rapidly by people flying around the world. The British Foreign & Commonwealth Office has advised against all but essential travel "indefinitely". The UN World Tourism Organisation reported that 100% of tourism destinations now have travel restrictions in place. 45% have totally or partially closed their borders for tourists, 30% of destinations have suspended international flights either totally or partially. The EU closed all Schengen Borders for 30 days from 17 March. Aljazeera has a useful country by county list of border closures.

Covid-19 is not the only crisis confronting us. The UN Secretary General, Antonio Guterres, pointed out on Earth Day, that the toll taken by the virus is both "immediate and dreadful". But the crisis is also a wake-up call, "to do things right for the future." He argues that "Public funds should be used to invest in the future not the past." The subsidies to businesses which damage our environment must cease and polluters must pay for their pollution. Climate risks must be at the heart of all public policy.

Aviation has been hit very hard by the pandemic. It will be some time before significant numbers of people will be travelling again. Airlines are grounded. Airbus has suspended its dividend, cut production by a third and furloughed thousands of staff , Boeing is planning to cut 15,000 jobs, and Rolls Royce is to cut 8,000 jobs.

Is the crisis an opportunity?
The average age of a commercial aircraft is about 25 years for a short-haul aircraft and 35 years for a long-haul aircraft. Aircraft entering service now will still be flying post-2050, or at least that is the plan.. As other industries decarbonise, aviation will be responsible for an increasing proportion of global greenhouse emissions and guilty of worsening climate change.

The French government's rescue of Air France is contingent on a reduction in domestic flying and Air France becoming "the most environmentally respectful airline". "When you can travel by train in less than two and a half hours, there is no justification for taking a plane." M. Le Maire, France's Minister of the Economy and Finance, said the coronavirus crisis provided an opportunity to "reinvent our model of economic development to ensure it is more respectful of the environment".

2% of the fuel used by Air France's planes would have to be derived from alternative, sustainable sources by 2025 and by 2030 the airline would have to cut its carbon emissions by half per passenger and per kilometre from 2005 levels. more

The pandemic creates two opportunities for better aviation:

  1. Conditional financial support, tied to increased carbon efficiency with enforceable targeted reductions. There need to effective sanctions to ensure compliance with the conditions.
  2. Redundant engineers and designers could be employed with scientists in industry and universities to achieve the step change the industry requires to decarbonise. The Royal Society concluded in a report in September 2019 that
    "Synthetic biofuels and efuels offer a medium (5 to 10 years) and a long term (10+ years), transition pathway to decarbonisation by reducing fossil fuel use in transport modes such as shipping, aviation and heavy-duty vehicles."

    The dependency of aviation on government bailouts creates an ideal opportunity for governments to encourage and fund a step change and to develop new technologies which could provide sustainable jobs through green technology and a
    commercial lead for UK Ltd.

A note on the British Dimension
Back on 24 March the UK government ruled out immediate direct aid to the aviation sector. The Chancellor of the Exchequer Rishi Sunak said that firms must first tap all commercial avenues to raise funds, and that any assistance the state does provide will be structured to protect taxpayer interests.

British Airways* appears to have accepted that there is “no government bailout standing by” and is turning to cost cutting. BA is now owned by the International Airlines Group which is reported to be targeting BA rather than its other airlines because it has the highest costs in the group. BA is reported to be planning 12,000 redundancies; it currently has 42,000 employees. Branson has put Virgin Atlantic up for sale, the loss making airline has failed to meet the criteria for the UK Treasury’s Covid Corporate Financing Facility,

*Although BA still flies the flag it is important to remember that it merged with Iberia in 2011. The International Consolidated Airlines Group, S.A, is an Anglo-Spanish multinational airline holding company with its registered office in Madrid, As British Airways was the larger company, those holding shares in British Airways at the time of the merger were given 55% of the shares in the new, merged company. British Airways and Iberia ceased to be independent companies and instead became 100% owned subsidiaries of IAG.

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