When the last government restrictions are lifted and people are free to make their own decisions again, how quickly will the market for international holidays and business travel be picked up, and what type will the airline industry be in to respond?
Such issues are crucial to the economic recovery of Glasgow. The city’s economy’s growth and its airport have been closely intertwined. Not only the leisure tourism on which so many of our local companies depend, but also investment decisions in financial services and healthcare, the location of literally hundreds of business conferences that are the core of Scotland’s event campus, and the willingness of global industries such as whisky and engineering to meet the size and scope of our international air connectivity.
It is now commonplace to argue that our preferences are continually changing and the need for travel is greatly diminished by the limitations of Covid-19 and the emergence of online conferencing and homework. But a long-standing complementary partnership will be disrupted by that. For decades, telecommunications use and travel have basically evolved in lockstep.
There is proof of the pent-up demand for international travel. Travel website Skyscanner registered a 48 per cent rise in transactions for Easter and summer vacations when the Pfizer/BioNTech vaccine was first released. A 50 percent rise in bookings was announced by EasyJet.
There may be some initial caution, especially among those who are more vulnerable to the virus, but it’s difficult to believe that we’re ready to give up our summer sun, our city holidays, or our friends and family long-haul visits.
Now that businesses have learned what can be done without corporate travel budgets, business travel may take longer to recover, but the SEC also notes that many of the business conferences that fell victim to the Covid 19 restrictions were simply rebooked for later in the calendar.
Demand will recover, but will there still be familiar flight options available? To deal with the downturn in travel demand, airlines have downsized their fleets. Some aircraft are being permanently scrapped, such as the Boeing 747.
In the world, every airport will force airlines to reopen their routes, and airlines will wisely choose their priorities. To restore the missing ties, Scottish airports will be in fierce competition. The problem is well known to some governments. Last month, in addition to its own version of the work retention scheme, the Irish government announced an enhanced package of EUR 80 million in financial support for its aviation industry. Michael McGrath, Minister of Public Spending and Reform, said, “Ireland is an open and global economy and it is critical to our economic progress that we have a strong aviation sector.” Ireland has also shortened the quarantine requirement for arriving passengers from 14 to five days if they test negative.
The Glasgow Chamber’s own feedback shows that the main airports in Scotland do not feel as well supported. Granted, this year, airports got rate relief, but there is no evidence that the Scottish government is emulating the U.K. The decision of the government to use research to minimize quarantine requirements.
In the U.K. Last week, the government released its Global Travel Taskforce report, committing to a set of tourism and aviation protection initiatives and remediation plans. Perhaps by taking short-term testing steps, reconsidering their stance on air passenger duties, and endorsing route creation funds in exchange for industry commitments to net zero flights, the Scottish Government could do something along its lines. Our economic growth, if we take our airports more seriously, would be much quicker.
Stuart Patrick is the Chief Executive of Glasgow Chamber of Commerce