Coronavirus: Airport cargo services 'perilously close to collapse' with around 25,000 jobs at risk

The four main ground handling companies at UK airports have warned of the imminent collapse of the aviation sector and the loss of thousands of jobs.

Swissport, dnata, WFS and Menzies provide 90% of airport handling in the UK, but in a joint letter the businesses warned they are unlikely to continue their operations during the coronavirus pandemic, if they do not receive government support.

The Covid-19 outbreak has led to travel restrictions in many countries and the majority of flights being suspended.

The letter, addressed to the Chancellor, says the ground handling industry is a “critical part of the UK’s aviation industry” and if it collapsed airports could be forced to close.

Flights have been suspended amid the coronavirus pandemic. Credit: PA

“Without our services and these dedicated teams, the airport infrastructure in the UK would grind to a halt for up to four months and it would take even longer to fully recover once the initial crisis is over,” the letter says.

“We have all been able to weather previous crises, whether 9/11, SARS or the Icelandic volcanic eruption, but Covid-19 is different, as it is both global and longer term.”

The four companies employ 25,000 people at the majority of UK airports and provide nearly all of the cargo and passenger handling.

These services include aircraft fuelling, baggage handling, departure gate services, the handling and security of cargo and aircraft cleaning.

Ground handlers are a critical part of the UK’s aviation industry. Credit: PA

The CEOs of the companies have called for urgent government support, as they say the industry has lost 95% of revenue over the past few weeks, as flights are grounded amid the coronavirus pandemic.

The sector operates a “low-margin model” and is paid on a “per-service basis” so the revenue is cut off when flights are suspended.

Jason Holt, CEO of Swissport for Western Europe, said without government assistance, the industry is “perilously close to collapse.”

“The aviation system is a triangle of airlines, airports, and ground handling businesses,” Mr Holt said.

“Without cargo and ground handling companies, international supply chains will stop functioning during the COVID-19 pandemic and recovery.”

The ground handling industry is paid on a 'per-service' basis. Credit: PA

Mr Holt said Swissport and the other companies welcomed Chancellor Rishi Sunak’s work retention scheme, in which government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month.

But he said the Chancellor’s announcement needed to be quickly processed “into actual cash funding to support our workforce.”

Mr Holt said other measures should include a holiday from tax and National Insurance for employees and employers until 2021 and the removal of business rates this year.

The companies have also asked for the relaxation of eligibility criteria of government business loans, as the four firms do not meet criteria.

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