Author: Whitestone Chambers

The new Coronavirus, COVID 19, has been wreaking havoc on the international aviation industry for almost 3 months now. A sharp decline in travel demand, strict travel restrictions and general fear among the masses have halted global travel & resulted in huge losses for airlines. The second quarter alone has shown around a 70% drop in demand in the international aviation industry resulting in the loss of 61 billion USD. [1] International Air Transport Association (IATA) has estimated that roughly 25 million jobs in aviation are at risk with 11.2 million & 5.6 million jobs at risk in the Asian-Pacific & European regions alone respectively.[1] Many airports have been shut down by travel restrictions and some have little to no revenue left, which was mainly generated from duty-free, car parking and concessions.
Although safety precautions are being considered by most airlines; disinfecting the aircraft, assigning particular seats on the aircraft and leaving the middle seats vacant to respect social distancing guidelines, most airlines are expected to hold the fort for only a few months before they start seeking government financial aid to continue operations. Some airlines have been already been contacted by governments to assist in bring citizens back home while some passenger flights are transporting essential supplies, medical & protective equipment and food instead of people. The UK government launched a $75 million airlift project at the end of March to repatriate thousands of Britons via airlines including British Airways, Titan, EasyJet, Jet2 and Virgin to accommodate stranded citizens to travel back to the UK through charter flights and arranging seats on commercial airlines.[2]
It is being predicted that national governments will have to lend a hand to keep airline companies afloat with Dr Frankie O’Connell, University of Surrey reader in air transport management, considering the three possibilities of government intervention:
1. Taking equity in the airline,
2. Deferring taxes, fees and any loans to carriers to a much later period, or
3. Nationalisation.[2]
With the impending summer season, a time when airlines earn most of their yearly income, coronavirus can cause irreparable damage to the future of airline companies especially due to the predicted oncoming 2020-2021 recession. [3]
Among all this tension, some countries have completely shut down passenger air travel while other resume activities with restrictions. A recently publicised list showing travel restrictions in individual countries can be found below:

Banned Air Travel
Algeria
Angola
Belize
Bolivia
Cameroon
Chile
Comoros
Colombia
Costa Rica
C’ote d’Ivoire
Cuba
Cyprus
Democratic Republic of the Congo
Djibouti
Dominica
Dominican Republic
Ecuador
Egypt
El Salvador
Fiji
Ghana
Georgia
Guinea-Bissau
Guyana
India
Iraq
Jordan
Kenya
Kiribati
Kuwait
Kyrgyzstan
Latvia
Lebanon
Liberia
Luxembourg
Madagascar
Mauritania
Mongolia
Morocco
Nepal
Nigeria
North Macedonia
Oman
Pakistan
Paraguay
Panama
Peru
Poland
Rwanda
Samoa
Saudi Arabia
Seychelles
Solomon Islands
Serbia
Senegal
Slovakia
Slovenia
South Africa
Sri Lanka
Sudan
St Lucia
Tajikistan
Thailand
Tonga
Trinidad and Tobago
Tunisia
Turkey
Turkmenistan
UAE
Uganda
Ukraine
Uzbekistan
Vanuatu

Restricted Air Travel

The United Kingdom
United States of America
China
Germany
Italy
Spain
Albania
Andorra
Monaco
the Netherlands
Austria
Azerbaijan
Belarus
Belgium
Bosnia-Herzegovina
Bulgaria
Croatia
Czech Republic
Denmark
Finland
France
Greece
Hungary
Iceland
Ireland
Liechtenstein
Malta
Moldova
Portugal
Romania
Russia
Sweden
Switzerland

[4] [5]

[1]: https://www.aerospace-technology.com/news/iata-aviation-coronavirus-jobs/
[2]: https://www.airport-technology.com/features/covid-19-and-the-aviation-industry/
[3]: https://centreforaviation.com/analysis/reports/covid-19-no-more-normal-for-aviation-519513
[4]: https://www.thenational.ae/lifestyle/travel/the-full-list-of-countries-where-commercial-passenger-flights-are-grounded-due-to-the-coronavirus-1.996215
[5]: https://www.theguardian.com/travel/2020/mar/24/coronavirus-travel-updates-which-countries-have-restrictions-and-fco-warnings-in-place

The aviation industry is currently responsible for around 2% of carbon emissions globally each year¹, and this is forecast to triple by 2050². With this projected rate in mind, members of the Sustainable Aviation coalition, which includes most major airlines and airports, as well as aerospace manufacturers, are planning to sign a commitment to reach zero net carbon emissions by 2050, with a third of the reduction being achieved through carbon offsetting.

One method of reducing the carbon emissions of aircraft is to invest in the development of technology used in these aircraft, resulting in greater efficiencies of engines and lighter aircraft. By increasing these efficiencies, aircraft consume less fuel, and therefore have lower overall carbon emissions. Rolls-Royce is an example of a manufacturer that is making this investment, through the development of its next generation UltraFan engine which will have lean-burn and low-emission combustion, an advanced core with ceramic-matrix composites and super nickel alloys, and a power gearbox in order to reduce fan speed³. Looking towards other aircraft manufacturers, the developments made by Airbus and Boeing today are far more efficient in respect of fuel burn, emissions and noise than the previous generations of aircraft that they superseded.

When discussing carbon emissions from flights, it is important that all parties involved are open and clear in their conversations. One of Ryanair’s recent advertisements was banned by the Advertising Standards Authority on the basis that its carbon emission claims could not be backed up. This was then followed by Ryanair claiming that “consumers could halve their carbon footprint if they switched to Ryanair”. However, the figures used by Ryanair may appear more favourable as they have fewer empty seats on their flights, resulting in the average carbon footprint being smaller. This figure may appear lower than its competitors, however, it does not involve investment in technology to improve efficiencies and reduce the overall footprint of the aircraft.

The reduction to net zero carbon emissions includes the strategy of offsetting carbon emissions by methods such as planting trees to take in and store the excess carbon emissions, and through the use of biofuels. The issues faced by these strategies are that trees can take 15-35 years until their impact is realised, and this could be halted by the trees being felled before they reach maturity. Biofuels offer a net zero carbon possibility, however, this analysis only focuses on carbon emissions taken in by plants during their lifetime, and equates this to the carbon emissions that are released when the fuels are burned. This does not take into account any other carbon emission related activities such as using machines to harvest the grown crops.

As a result of this, there are critics of the use of carbon offsetting as a method of achieving zero net carbon emissions such as John Sauven, the UK executive director of Greenpeace, who dismisses the strategies as “greenwash”.

To ensure that the aviation industry can meet this ambitious target, these strategies and others must be implemented and followed through consistently. By improving technology, ensuring flights are at maximum capacity and by investing in biofuels and planting schemes, it may be possible to achieve the ambition of net zero carbon emissions by 2050.

© 2020 Whitestone Chambers

www.whitestonechambers.com

law@whitestonechambers.com

[1] https://www.atag.org/facts-figures.html

[2] https://www.nytimes.com/2019/09/19/climate/air-travel-emissions.html

[3]https://www.rolls-royce.com/media/our-stories/innovation/2016/advance-and-ultrafan.aspx#overview

The Henley Passport Index ranks all of the world’s passports by the number of destinations that their holders can access without a prior visa. The Henley Passport Index for 2020 ranked Japan and Singapore as the world’s most travel-friendly passports offering access to 191 and 190 countries respectively.[1] The lowest ranked country is Afghanistan in which a citizen can only access 26 countries without a prior visa.

South Korea, which had shared pole position last quarter has dropped to third place alongside Germany. These passports offer access to 187 destinations around the world without a prior visa.

One of the most notable shifts in the index was the United Arab Emirates. Over the past five years, the UAE has more than doubled the number of destinations its citizens are able to travel to without a prior visa, bringing it to a score of 171 and a ranking of joint 18^th.

Dr Christian H. Kaelin, Chairman of Henley & Partners and the creator of the passport index concept said, “Countries around the world increasingly view visa-openness as crucial to economic and social progress.”[2] There is a direct correlation between visa openness and progressive reform. Countries moving towards nationalist isolationism and away from policies that encourage visa-openness generally experience reduced economic growth, social integration and progressive political change.[3] The higher rankings in countries such as Japan and Singapore are likely to reflect the introduction of mutually beneficial trade agreements. Over recent years, countries have been adapting to mobility as a permanent condition of global life, and countries holding this belief are thriving with their citizens enjoying ever-increasing passport power and the array of benefits that come with it.[4]

Countries generally relax their visa regime to promote fresh economic opportunities linked to the travel and tourism industry, including hospitality and conference sectors. The relaxation of a visa regime helps to grow the tourism sector, bringing greater economic advantages and more jobs for people nationwide.

An example of a country that has successfully implemented a visa-openness regime is Ethiopia whereby the country’s travel and tourism economy witnessed the largest growth of any country worldwide according to the WorldTravel and Tourism Council. The country’s dynamic economic growth has been mirrored in a rise in its rank in the World Bank’s Doing Business Index.[5] While discussions of passport power and mobility tend to focus on benefits for the countries with the strongest passports, increased visa-openness benefits the entire global community.

[1]https://www.independent.co.uk/travel/news-and-advice/passports-best-japan-singapore-most-powerful-visa-free-travel-a8986621.html

[2]https://edition.cnn.com/travel/article/henley-index-world-best-passport-2019-intl/index.html

[3]https://www.henleypassportindex.com/assets/2019/Q3/HPI%20Report%20190701.pdf

[4]https://www.travelandleisure.com/travel-news/japan-most-powerful-passport-in-the-world

[5]https://www.visaopenness.org/our-findings/countries-moving-up/

© 2020 Whitestone Chambers

www.whitestonechambers.com

law@whitestonechambers.com

With Britain’s biggest regional airline, Flybe, reported to be at the verge of collapse this week, news outlets reported that the carrier was trying to secure additional funding and that the accountancy firm Ernst & Young was on standby to handle the possible administration of the Flybe Group if the funding talks were unsuccessful. Normal operations continued and the airline stated that Flybe would continue to provide great service and connectivity for customers to ensure that they could continue to travel as planned.[1]

The reasons[2] for the possible collapse of this regional airline stems, to a great extent, from the uncertainty of Brexit which hurt its demand. Moreover, the value of the pound slumped drastically after the referendum in 2016 dealing with the U.K.’s exit from the European Union. Additionally, Flybe’s size and its competition with other bigger airlines has contributed to its struggles to a great extent. Whenever a Flybe route becomes successful, bigger airlines with larger aircraft move into the market and sweep up. Flybe has almost been driven out of Bristol, with easyJet now having a monopoly in Belfast, Edinburgh, Glasgow and Newcastle. Flybe is also in competition with rail and road as an air passenger duty of £26 on a round-trip within the U.K. may put people off flying. Demands for air travel remain low as competing rail links are improving, for example new rail timetables introduced on GWR dramatically improved services from Devon to London, damaging the appeal of the Flybe link from Exeter to the Capital. Moreover, regional airlines are arguably the most difficult to operate, due to the relatively short duration of many flights and correspondingly low revenues and profits.

Businesses, unions and MPs urged action to help preserve vital air links between cities around the U.K.

On 15 January 2020, the government agreed a deal with Flybe to implement a re-payment plan for Flybe’s tax bill of around £100 million. Flybe chief executive Mark Anderson welcomed the deal as a “positive outcome for the U.K.” which “will allow us to focus on delivering for our customers and planning for the future.”[3] Prime Minister, Boris Johnson stated that there are limits to what a government can do to rescue a business, but that the government has an obligation to ensure that the country has the regional connectivity it needs.[4] The government insisted that Flybe had not been given “any sort of special treatment” given that HM Revenue & Customs will allow companies of many different types to spread payments under a “Time to Pay” arrangement.[5] According to the most recent Reuters Report, the EU is willing to enter discussions with Britain regarding its rescue of regional airline Flybe, noting that any state aid should be designed to avoid distortion of competition and to ensure a level playing field continues.[6]

The news of the government intervention has angered some in the aviation industry. British Airways’ owner IAG filed a complaint to the EU arguing Flybe’s rescue breaches state aid rules. The BBC[7] reported that Willie Walsh, the outgoing chief executive of IAG, wrote to Transport Secretary Grant Shapps, criticising the government’s involvement in its rescue.

In a letter, Mr Walsh said: “Prior to the acquisition of Flybe by the consortium which includes Virgin/Delta, Flybe argued for taxpayers to fund its operations by subsidising regional routes. Virgin/Delta now want the taxpayer to pick up the tab for their mismanagement of the airline. This is a blatant misuse of public funds.”

In the same article, the BBC quoted easyJet chief executive Johan Lundgren as saying: “Taxpayers should not be used to bail out individual companies, especially when they are backed by well-funded businesses” and that Ryanair had called for “more robust and frequent stress tests on financially weak airlines and tour operators so the taxpayer does not have to bail them out”. The news also angered environmental groups and rail companies.

The British Airline Pilots Association General Secretary Brian Strutton however welcomed the news and stated that “This is good news for 2,400 Flybe staff whose jobs are secured and regional communities who would have lost their air connectivity without Flybe.”

When Head of Chambers, Lawrence Power and Head of Legal Operations, Robert Pidgeon visited the Flybe facility in Exeter, they were impressed with the high-quality infrastructure and training programmes in Flybe’s training academy. The Academy is a modern international facility that includes a flight simulator complex, Cabin Door trainer, purpose-built classrooms and an integrated Apprentice workshop allowing Flybe to offer an increased range of training. The employees, ranging from pilots to cabin crew are committed and well trained and shutting down Flybe would mean devastating job losses for Flybe’s loyal employees.

Whilst the arguments and criticisms continue, fortunately so do the flights which is a big relief for the Flybe employees and the 8 million people a year who currently depend on Flybe’s service.

© 2020 Whitestone Chambers

www.whitestonechambers.com

law@whitestonechambers.com

[1]https://www.independent.co.uk/travel/news-and-advice/flybe-collapse-bust-administration-atol-flight-virgin-atlantic-stobart-a9280941.html

[2]https://www.independent.co.uk/travel/news-and-advice/flybe-collapse-bust-administration-atol-flight-virgin-atlantic-stobart-a9280941.html

[3]https://www.msn.com/en-gb/news/newslondon/british-airways-owner-files-complaint-over-governments-decision-to-rescue-flybe-from-collapse/ar-BBYYJWc?ocid=spartanntp

[4]https://www.theguardian.com/business/2020/jan/14/flybe-government-talks-airline-tax-bill-sajid-javid

[5]https://www.ft.com/content/961f87ca-3766-11ea-a6d3-9a26f8c3cba4

[6]https://uk.reuters.com/article/us-flybe-funding-eu/eu-ready-to-discuss-with-uk-state-aid-for-flybe-airline-idUKKBN1ZE1IK

[7]https://www.bbc.co.uk/news/business-51117885

The proportion of women at the highest level of corporate roles in the aviation industry is 3%, which represents one of the lowest levels of female representation across all industries.[1] As of June 2018, 18 women held the role of CEO, President or Managing Director across all commercial airlines.

Obstacles to corporate roles can involve stereotyping in the recruitment process as to what are seen traditionally as female and male traits. These stereotypes can cause difficulties as incorrect assumptions may be made about a woman’s personality and skillset, leading recruiters to deem them a poor fit for the organisation.[2] The low visibility of women at the highest corporate levels can also make the environment seem unwelcoming to other women. This has led to a phenomenon called “Vertical Segregation,” whereby men predominantly work in senior management whilst women generally work in roles below this.

Given the low proportion of women recruited at these levels, some airlines such as Flybe (before being acquired by Virgin Connect), easyJet and TUI have taken steps to encourage women to become pilots. The then CEO of Flybe, Ms Christine Ourmieres won the Inspirational Role Model Award in June 2019 at the IATA Diversity and Inclusion Awards for raising the profile of aviation among young people and inspiring young women to join the aviation industry. She introduced the highly successful FlyShe initiative which received coverage both in the U.K. and abroad.[3] As part of the FlyShe initiative, female pilots and engineers spoke with pupils, produced educational materials for schools to host their own sessions and encouraged young women to consider high level roles as their future careers. They also provided two places for women on their engineering apprenticeship scheme.[4]

Other progressive examples include Air France hiring its first ever female CEO, Ms Anne Rigail in December 2018, and Zoom Air, an Indian regional airline hiring 9 female pilots out of an intake of 30. Another example of promoting the technical abilities of women is the ‘Chix Fix’ group of female technicians from the USA, which was formed in November 2018, to compete as the first all-female commercial airline team in the Aerospace Maintenance Competition. The competition takes place every year in the USA and provides an opportunity for current and future maintenance professionals to demonstrate their technical knowledge in aviation maintenance. The Chix Fix group competed to raise an awareness that aircraft maintenance is a career path for people of all genders.[5]

There are two promising strategies in diversifying high-level roles in the aviation industry in the long-term. The first involves active recruitment of women into executive level positions, providing support and assigning a mentor who can answer their questions regarding company or industry-specific issues. The second strategy involves introducing aviation as an achievable aspiration for young women through providing information at educational events. Critically, there is a need for a cultural change at the highest corporate level. The board itself needs to be outspoken in advocating the need for diversity.

It is important to break down stereotypes and increase the visibility of women in high level aviation roles, which in turn will result in an increase of female aviation professionals as role models for young women, increasing the number of talented women that thriving in high level corporate roles.

© 2020 Whitestone Chambers

www.whitestonechambers.com

law@whitestonechambers.com

[1] https://skift.com/2014/05/14/women-account-for-fewer-than-5-of-airline-ceos-around-the-world/

[2] Gaucher, D., Friesen, J., & Kay, A. C. (2011). Evidence that gendered wording in job advertisements exists and sustains gender inequality. Journal of Personality and Social Psychology, 101, 109–128

[3] https://www.iata.org/en/pressroom/pr/2019-06-03-01/

[4] https://www.aviationadr.org.uk/flyshe-flybes-new-campaign-to-encourgage-more-women/

[5]https://www.internationalairportreview.com/news/82492/five-times-the-aviation-industry-championed-gender-equality-in-2018/