If the government takes a majority stake in our airlines it will put us and our climate on a path to recovery

We can start the process to guide the sector’s transition to permanently lower passenger numbers, writes Alex Chapman

(PA)

After weeks of heated debate, British Airways’ refusal even to pause its redundancy drive should be the final straw for such a heavily subsidised sector. The company has decided to press ahead with cutbacks that could result in 12,000 job losses.

Seldom is the British public as kind to a sector of the economy as it is to aviation today. Tax breaks, in the form of exemption from VAT and fuel duty, are the most longstanding of our generosities. Even when Air Passenger Duty (the tax per ticket which airlines pay to the government) is factored in, we’re cutting airlines a lucrative, bespoke tax deal worth billions. On top of this, aviation is exempt from worrying about our legally-binding carbon reduction targets.

Given this context, you might expect some humility from the industry’s handsomely-paid CEOs and shareholders, but across the sector, exploitative employment practices proliferate. Outsourcing in particular has been used to drive down wages and working conditions for airline employees. Both airlines (like Virgin Atlantic), and the companies they lease their planes from, base their parent companies in tax havens where they can avoid corporation tax. CEO salaries and pay-outs to shareholders continue to grow out of all proportion, reaching almost £600m at BA in 2019.

With so much money sloshing around, surely businesses in an industry as notoriously turbulent as aviation might have put a little aside for a rainy day? Yet seemingly this isn’t the case. And despite the government extending their furlough scheme, which pays 80 per cent of payroll costs, and handing out loans worth £300m, British Airways have announced that its 12,000 redundancies must go on. The cost of sustaining workers on the books, at least until the end of the furlough period, would be far less than the amount being extracted by shareholders and executives each year. But we are told this is too much to bear for a company which made an after-tax profit of over £1bn in 2019.

Workers in the firing line are in an unenviable position. Not only do they face the stress of unemployment, but the truth is that for many, this could be the end of their careers in the aviation sector. Even before the crisis set in, Unite the Union documented how hard it was for workers let go by Thomas Cook to find work within the sector.

For a long time, aviation has been an industry particularly exposed to automation and corporate efficiency cuts, which reduce the availability of jobs. After a nationwide shift to social distancing, working from home and holding meetings remotely, it’s likely that the sector will never look the same again. An industrial transition is looming, even before we think about what the need to cut our carbon emissions means for airlines. Up to now, consistent growth in passenger numbers since 2010 has just about managed to maintain employment levels in the sector but, if we want to prevent climate breakdown, this can’t continue. The industry has to change along with the rest of our economy, but it must be fair, carefully managed, and ensure that all affected workers share in the benefits.

If aviation companies are allowed to continue along their present course, the sharp hit to employment could compare with some of the UK’s most painful industrial conflicts. Between 1981 and 1982, over 50,000 jobs were lost in the UK’s coal industry, and mining communities were plunged into hardship from which they would take decades to recover. With airlines collectively proposing over 20,000 job losses – even with substantial government assistance in place – we could easily be in similar territory.

The past few months and years have shown that the airline industry cannot be trusted to take a balanced approach to protecting workers’ wellbeing. The only way this will now be achieved, and to set the industry on a course to sustainability and a zero-carbon economy, is for the UK government to take a temporary majority stake in UK-registered airlines. Temporary control of aviation companies would mean that they can be run in the short-term interests of their workers during the period of crisis, before a democratic process can start to guide the sector’s transition to permanently lower passenger numbers. Government ownership is not an end in itself – but right now, it’s the only way that socially-motivated oversight of the sector can be implemented. Let’s stop subsidising shareholders and put the interests of people and planet at the heart of our crisis response.

Alex Chapman is a researcher at the New Economics Foundation