Critical airport services weeks from grinding to a halt in major threat to UK supply chain

Business leaders from the four main cargo and ground handling companies – Swissport, dnata, WFS and Menzies – are today warning of the imminent collapse of their sector, bringing airports across the country to a halt and severely impacting the UK’s supply chain during the COVID-19 pandemic. 

The ground handling industry is a critical part of the UK aviation system, providing 90% of cargo and passenger handling at all UK airports and essential services like the handling and security processing of cargo and aircraft fuelling. Without these services, aviation as a whole cannot function, and supply chains will collapse.

Currently, as more than 95% of flights are not operating, ground handling companies are not being paid. While the industry has welcomed the Chancellor’s work retention package, low margins and staff comprising 70% of costs mean that the viability of the industry remains immediately unsustainable.

Jason Holt, CEO of Swissport for Western Europe, said “As an industry we strongly welcome the Chancellor’s large-scale work retention package. Helping protect our employees and their jobs is a paramount concern of ours.

“However, even with this assistance, the aviation industry remains in crisis. And in light of the Chancellor’s recent letter to the sector, I have profound doubts that the fundamental challenges for the industry, both now and in the future, are being addressed.

“Without immediate support with taxation and charges, operational flexibility, and the flow through of the Chancellor’s announcement from last week into actual cash funding to support our workforce, we are perilously close to collapse.”

The ground handling industry will be working with HMRC to access funds committed by Government but are calling for further support, specifically through:

The relaxation of the eligibility requirements for either the Business Interruption Loans Facility or corporate finance loans offered by the Government.

A holiday from PAYE and National Insurance for both employees and employers, together with business rates relating to the significant number of premises they utilise.

To respect social distancing and the furloughing of their teams, they are calling for a practical six-month extension to the Civil Aviation Authority’s regulations requiring all staff to receive retraining every two years.

“The aviation system is a triangle of airlines, airports, and ground handling businesses. Without cargo and ground handling companies, international supply chains will stop functioning during the COVID-19 pandemic and recovery” added Holt.

“Our thousands of employees are keeping goods and parts moving safely and securely during the COVID-19 pandemic and will be integral to the recovery of airlines and airports once the initial crisis concludes.

 “The ground handling industry is robust and competitive in normal times. We have chosen to come together as one voice in these extraordinary circumstances to ask that we be given the essential and urgent support we need to ensure planes can continue to fly.”