RUTH SUNDERLAND: Aviation needs a huge lift

The crisis in the aviation industry goes far beyond holidays and jobs for cabin crew, important though those are. 

The Government’s abject failure to get the planes flying again is devastating for our aerospace manufacturing industry and will kybosh ambitions to be an open, free-trading economy post-Brexit. 

Most outrage has focused on leisure travel and the impact of quarantine on vacations and tourism. What politicians seem to have forgotten is that grounding flights has put our aerospace sector in jeopardy. 

Devastating: Politicians seem to have forgotten that grounding flights has put our aerospace sector in jeopardy

Devastating: Politicians seem to have forgotten that grounding flights has put our aerospace sector in jeopardy

Devastating: Politicians seem to have forgotten that grounding flights has put our aerospace sector in jeopardy

The lack of determined action is all the more perplexing given its importance. 

As the moment, the UK industry is the leader in Europe but not for much longer if we go on like this. 

It provides 374,000 direct jobs and many more indirectly, most highly skilled and well paid. The vast majority are in the regions, which are key to Boris Johnson’s ambition to ‘level up’. Before Covid, plane-makers enjoyed a period of success with healthy order books. There was some trepidation at a No Deal Brexit, but no one contemplated the wholesale blight being faced today. 

The two leading companies in commercial aerospace, Rolls-Royce and Airbus UK, have cut thousands of jobs. Melrose, which took over GKN, has also indicated it will be making large-scale staff reductions. 

A look at Rolls-Royce paints a grim picture of what companies are up against. Synonymous with British engineering excellence, it is on its knees, having made a record loss of more than £5billion after the air travel slump. 

The shares have tanked by two-thirds and Rolls is in danger of being ejected from the FTSE 100 elite index. Three thousand British jobs are under the shadow of the axe.

Worst of all, the UK’s flagship engineer has warned investors that Covid uncertainty may cast doubt over it as a going concern. In other words, there is a fair chance it might go bust.

Industry guru Howard Wheeldon believes that large operators such as Airbus and Rolls will survive, but he is worried about smaller supply chain companies, many of which are close to the point of no return. 

Trade body ADS has asked government to throw suppliers a £1billion lifeline in the form of a ‘patient capital investment fund’, backed by the industry, government and the financial sector. 

It is a good idea. Yet Chancellor Rishi Sunak, despite his generosity in other areas, has shown no inclination for a bailout of airlines or aerospace. His position is in contrast with France, where the Macron government put together a £13billion package shoring up Air France and Airbus. In Germany, Lufthansa has received an £8billion bailout and the US carriers have been offered a £19billion lifeboat. 

Some see aviation as a polluting industry unworthy of support. But backing it would actually be an investment in innovation and green technology. 

Melrose’s GKN division is exploring hydrogen power for jet engines and Rolls-Royce has produced breakthrough inventions such as small modular reactors to generate electricity that could be a far quicker, greener and cheaper alternative to costly new nuclear power stations. 

But for all our expertise and heritage, we could easily be overtaken by the French, if we continue on the current path. This country has a tremendous record in aerospace engineering. Every wing of every Airbus plane is made in Britain. Rolls-Royce supplies more than half of all engines used on Airbus and Boeing wide-bodied aircraft. 

Yet the Government shows little sign of having grasped the scale of the crisis. Ministers need to wake up fast. A betrayal of our aerospace industry would cost the country dear for generations to come.

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