London Luton airport is the fifth busiest airport in the UK, and its operation plays a central role in both Luton’s economy and the regional economy. Last year, it delivered £160 million in air passenger duty to Her Majesty’s Treasury. It was therefore no surprise to me, and probably will not be to the Minister, that the petition on support for the aviation industry had the highest number of Luton South signatories. I have also received many emails from cabin crew and pilots, from those working in security, retail, and hospitality, and from those in the wider holiday and tourism sector who work at companies such as TUI. The whole aviation ecosystem has been impacted by the crisis and they are all worried about their livelihoods.
Luton airport is not only a key jobs provider; because the airport is owned by Luton Council, each year an annual dividend is paid directly to the council to fund local council services. Covid-19 has caused passenger numbers at Luton airport to plummet by 98% and, as the airport dividend is based on a per-passenger basis, that dividend has all but disappeared too. The loss of such a vital commercial income stream into Luton Council means that it is being forced into making £22 million of in-year cuts to balance the budget. That will be devastating for services in our town and is likely to cause nearly 400 job losses at the council.
I have spoken to a number of employers and organisations linked to Luton airport’s operations and supply chain, and the common theme is that the Government’s decision not to introduce a sector-specific financial support package for aviation has deepened the sector’s economic crisis. The sector is interdependent: if one part falters, they all suffer.
We know for sure that the number of flights will not return to 2019 levels for the foreseeable future, that public health regulations will restrict day-to-day business for a long time, and that the economic implications will hamper aviation’s development towards net zero. A failure to introduce a tailored package that supports the industry in respect of each of these long-term problems will devastate the whole sector. The removal of the job retention scheme before the sector has returned to business as usual and passenger confidence has returned will lead to rising unemployment, slashed wages and, in some cases, attacks on workers’ rights. In Luton South, nearly 20% of our workforce has been furloughed, and because of the aviation sector’s uncertain future, jobs at easyJet, Swissport and Luton airport are already at risk of being cut.
There is a clear option for the way forward: a new package should include the protection of jobs and salaries, with a commitment to workers’ rights, and a clear commitment to tackling climate change for the industry, using cleaner fuels and low or zero-emission technologies. Companies in receipt of money must ensure that their tax base is in the UK; no dividends should be paid until the company has been proven to be commercially viable; and a commitment to pay UK-based suppliers must be a priority. There must be an aviation-wide bail-out package and it must be tied to social and environmental expectations.