THE BUSINESS OF INTERNATIONAL TRADE
A report published today, September 21, is arguing that £121bn worth of UK exports to the USA are at risk due to the ongoing travel disruption between the US and UK caused by the Covid-19 pandemic.
The report, jointly commissioned by Airlines UK, International Airlines Group, Heathrow Airport and Collinson, argues that as well as disrupting supply chains and putting export plans at risk, £417bn worth of Foreign Direct Investment is also at risk as the "air link remains closed between the UK and its most important trading partner".
When travel restrictions were introduced in March, the report indicates that seat capacity on Transatlantic routes fell by 92% compared to April 2019, and that in "September, published seat capacity is around 85% down on 2019". The report forecasts that by October, the UK will be losing £32m "each and every day the air corridor remains closed."
Discussing the disruption from a business perspective, Mike Cherry, National Chair of the Federation of Small Businesses (FSB), said that "The ties between the UK and US have long been crucial to the economies of both sides of the Atlantic, and now more than ever we’re seeing just how important those bonds are. Small businesses in parts of the country rely heavily on tourists visiting from the US, whether that be in cities like London or Edinburgh or in popular scenic areas right across the country. The past few months have been difficult for all businesses who have lost out on this crucial market."
Cherry also notes how the disruption is affecting UK exporters and importers, explaining that "for small firms waiting on the delivery of products to sell or as part of supply chains, it’s been an equally difficult time with factories forced to close or restrictions delaying manufacturing lines. The US is the number one target for small businesses looking to export, which is why we need to see these quarantine rules reviewed to help our ailing small firms both in the UK and the US."
John Holland Kaye, CEO of Heathrow Airport, responded to the report by saying "This is a stark warning that action is needed immediately to safely open up connections with our key trading partners in the US. We can start with flights to New York, a city where infection rates are now lower than here, and which is the UK’s most valuable route. PCR testing in private labs, both pre-flight and on arrival, would ensure that there is no risk of importing COVID and could pave the way to a Common International Standard for aviation testing."
To see the full report, go to airlinesuk.org/uk-economy-loses-32m-every-day-as-result-of-no-airbridge-with-the-us/
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