Marc Bailey: UK business aviation on verge of grounding due to Covid-19

The Covid-19 pandemic is rapidly hurtling UK business aviation to the point of ceasing for now, according to the British Business and General Aviation Association (BBGA) reported AIN. “The expectation is that by the end of the month everything will be grounded,” said association CEO Marc Bailey.

Bailey remarked that the pandemic has brought a consistent response from BBGA members. He also said that, operationally, there was a “very short peak where people repositioned themselves” before borders closed, but now things are slowing to a halt.

In terms of those employed by BBGA members, Bailey said: “People are expecting to apply a mixture of unpaid leave and some layoffs. Our sector is now heading to the same position as scheduled airlines where we will struggle to service our debt and cash flow will be the killer. Therefore, all the measures in terms of tax relief, business rates, and access to national funds need to be available to our sector.

Bailey said people forget that the industry comprises businesses that support the movement of people. Effectively business aviation is small to midsize enterprises that move passengers who may be more financially secure, but those businesses are no different from any other—they must generate revenue, make a profit, and maintain employment for staff, Bailey said.

The impact on all aspects of aviation, according to Bailey, was set to be “profound…It is highly likely that we will see a significant number of business casualties that will be defeated by cash-flow problems. The magnitude of this depends on how quickly the market opens in a global sense. Clearly it is not just how your home country is performing against the virus, it is how your normal client network is affected. If this spreads out over some three months, then there could be significant losses.”

However, he did suggest that the pandemic could drive further consolidation as stronger businesses with good reserves see opportunity for expansion.

From a UK perspective, Bailey said: “The anxiety is even greater because with the current Brexit position we are told we are out of EASA and we have no idea how [the Single European Sky] and the freedoms of the skies will pan out. For our sector, we need to access all those nine freedoms [of the air-as defined by the Chicago Convention]. Whilst 1 through 5 will possibly suffice for scheduled airlines, much of our business also relies heavily on 6 through 9.”

Bailey concluded: “I would suggest that in a couple of weeks we will be in full grounded mode across the sector and I don’t see that changing.”