Analysing the impact of COVID-19 on the UK aviation sector

In the context of the COVID-19 pandemic, the UK’s Airport Operators Association (AOA) wanted an independent report to be developed to demonstrate the damage suffered by the UK’s aviation industry (airports and airlines) and a review of the possible policy options which might be adopted to mitigate this.

We undertook a review of the impact of the pandemic on UK air traffic and the consequent impacts on aviation industry revenues, the consequent effects on liquidity and profitability, and the wider economic impacts on jobs and connectivity. We also compared the UK government’s COVID-19 mitigation and support schemes with those in other countries.

Looking forward, we developed three scenarios for the recovery of air traffic in the next five years and translated these into the impacts on aviation industry EBITDA and cash reserves.

Finally, we considered the plausible policy options available, including those affecting the underlying health situation (such as international coordination of COVID-19 testing), as well as financial and other business support packages which could be introduced.

The client was pleased with what they considered to be an excellent report. The analysis in the report has been used extensively in the client’s own “Airport Recovery Plan” publication.