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7,300 staff, 90% of its workforce, saying: “Most of our planes will be grounded.” All UK long-haul flights will cease from March 21. Chief executive Jacob Schram

noted: “The authorities of Norway have communicated they will implement all necessary measures to protect aviation in Norway.” EasyJet and Ryanair are

also grounding fleets, with easyJet chief executive Johan Lundgren warning: “Coordinated government backing will be required to ensure the industry survives.” Ryanair said it expects to cut capacity by up to 80% for April and May “and a full grounding can’t be ruled out”. Lufthansa-owned Austrian

Airlines announced the suspension of all flights from March 19, while the Lufthansa Group moved from a 50% cut in capacity to 90% on long-haul routes and 80% on short-haul. Details of the cancellations were due on Tuesday, with the new timetable valid at least until April 12. Air France-KLM unveiled a

capacity reduction of “between 70% and 90%, currently scheduled to last two months”, and welcomed statements by the French and Dutch governments that they are “studying all possible means to support the group”. Major US airlines were in talks

with the government, reportedly seeking up to $50 billion in aid, after American Airlines announced plans to cut 75% of international flights until at least May 6. Tim Alderslade, chief

executive of Airlines UK, warned: “The situation is now truly critical. Covid-19 risks a lasting and irreversible effect on the UK’s aviation industry.”

Sunak disappoints airlines with lack of change to APD

The government ignored industry demands to cut or suspend Air Passenger Duty (APD) in the Budget and instead announced an inflation-linked rise in the tax. The chancellor made no

reference to APD in his Budget speech, but Treasury documents reveal APD rates will rise in line with the Retail Price Index (RPI) rate of inflation from April 2021.

Airlines and industry

associations reacted with disappointment. British Airways parent IAG said: “Given the acute pressure on business, the hike in APD will make it even harder for UK firms to trade.” The Treasury did confirm it will

consult on APD reform this spring, in line with a pledge in January, but it made clear the review will be limited to “the case for changing the APD treatment for domestic flights” while also considering “increasing the number of international distance bands”. APD is currently levied on flights in two distance bands – up to 2,000 and beyond 2,000 miles.

Long-haul APD will rise on April 1

Dale Keller, chief executive

of the UK Board of Airline Representatives, declared the industry “deeply frustrated”, saying: “Airlines had requested a six-month waiver of APD.”

Travel chiefs give mixed reaction to Budget plans

Ian Taylor

Industry leaders welcomed measures to help small businesses through the coronavirus crisis in the Budget on March 11. But aviation bodies expressed frustration at the lack of support for airlines. Chancellor Rishi Sunak

announced a £30 billion package of measures to counter the Covid-19 epidemic, including £2 billion in funds to support small businesses. These include a year-long

suspension of business rates, refunds

of up to 14 days’ sick pay for staff absences at businesses with fewer than 250 employees, and a ‘business interruption loan’ scheme. The Bank of England also cut

interest rates last week. Abta chief executive Mark Tanzer said: “The chancellor has acted quickly and decisively with measures that will support smaller businesses.” However, he said: “The

government must work with lenders to ensure the measures designed to increase short-term access to credit are effective.”

Kate Nicholls, chief executive of the UKHospitality association, said: “Hospitality businesses are on the frontline of coronavirus impacts and need support. Easing business rate burdens and partial refunding of statutory sick pay will help support some businesses.” But she added: “It’s vital to recognise larger operators, which have been utterly ignored at a time of business crisis.” Airline associations were less

welcoming. Airlines UK chief executive Tim Alderslade described the Budget as “disappointing” and Dale Keller, chief executive of the UK Board of Airline Representatives, said: “The chancellor’s Budget speech made no mention of any support for the aviation sector despite airlines being uniquely impacted by the Covid-19 crisis.” The chancellor made clear the

Chancellor Rishi Sunak

46 19 MARCH 2020

government’s intention to raise taxes on pollution and announced the introduction of a plastic packaging tax from April 2022.

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