Heathrow6.45% S Regulatory News (88BX)

Heathrow CEO: Ministers need a Plan B for Britain's aviation sector if it remains grounded

· Heathrow has faced 15 consecutive months of supressed demand, with May's passenger numbers languishing at 90% below pre-pandemic 2019 levels - a loss of over 6 million passengers in the month.

· One month after Government hailed the restart of international travel and assured the public that a risk-based traffic light system would unlock low-risk travel, the system has yet to achieve what it was designed to do. Ministers' refusal to provide transparency on the data behind the decision making and failure to introduce a green 'watchlist' has undermined consumer confidence. At the next review on June 28th, the Government must rely on the science and restart travel to low-risk countries like the US, clear a pathway to restriction-free travel for vaccinated passengers and replace expensive PCR tests with lateral flow for low-risk arrivals.

· With Ministers now promising to prioritise the domestic unlock and no clear end date to travel restrictions, a bespoke support plan for the beleaguered and neglected travel industry must be forthcoming. The sector employs tens of thousands of people across Britain who will be wondering what will happen to their jobs and livelihoods after another lost summer. The Government should provide targeted compensation to the sector, starting with business rates relief and an extension to the furlough scheme whilst Ministers continue to keep travel locked down.

· Reopening transatlantic travel is critical to the UK and US and we welcome the establishment of the joint travel taskforce. Earlier this week the CEOs of American Airlines, British Airways, Delta Air Lines, JetBlue, United Airlines and Virgin Atlantic and Heathrow Airport joined forces to stress the need to safely reopen the transatlantic corridor. CEBR research shows that Heathrow's US passengers accounted for over £3bn pounds of spend across the UK in 2019. Pre-pandemic Britain was the top destination for US tourists, but this leadership position is at risk of being snapped up and our Global Britain ambitions undermined by France and Italy, who are already set to open their doors to vaccinated American travellers in the coming weeks.

· G7 leaders must seize the opportunity to join forces and tackle one of the biggest challenges facing our generation, climate change. Major carriers within G7 states have committed to net-zero flying by 2050, however we can only achieve this goal by rapidly scaling up the use of sustainable aviation fuels (SAFs). The technology exists - Heathrow took its first delivery of SAF last week - but we need the right Government policies to build confidence in demand. We are calling on world leaders to collectively commit to escalating mandates of 10% SAF use by 2030, growing to at least 50% by 2050 and price incentive mechanisms similar to those that have kick started other low carbon sectors. The G7 should take a global lead in committing to net-zero aviation, agree to at least 10% SAF in its communique, and build a global coalition for those who back that ambition.

Heathrow CEO, John Holland-Kaye said: "With the G7 starting today, ministers have a chance to kickstart the green global recovery by agreeing how to resume international travel safely and setting a mandate for sustainable aviation fuels that will decarbonise aviation. This is the time for them to show global leadership."