By Scott Wright

DEREK Provan has heard people in government say they understand the plight of the aviation sector plenty of times since the coronavirus pandemic took hold. But their words, in his experience, have still to be matched by meaningful action.

As chief executive of AGS Airports, owner of Glasgow, Aberdeen and Southampton airports, Mr Provan has seen first-hand the economic devastation caused by the crisis. In accounts published earlier this month, the directors of Glasgow Airport said the ongoing upheaval poses material uncertainties that cast doubt on its ability to continue as a going concern.

The crisis has already led Glasgow to cut staff. Across the campus, around 30 per cent of the 6,000-strong workforce, who were employed directly or through partners such as retailers, have been made redundant.

“I walk around an airport with empty shops,” Mr Provan said. “I don’t see the people I used to see. I see aircraft sitting parked on the airfield, going nowhere and haven’t done for months, and I see my car parks empty.”

Some 10 months into the crisis, traffic at Glasgow Airport is down 90 to 95 per cent on this time last year. And, with new quarantine rules belatedly introduced by the UK Government, its fortunes are not about to bounce back any time soon. The new regulations mean people arriving in the UK must have proof of a negative coronavirus test, and self-isolate for 10 days.

“What we have seen is layer on top of layer on top of layer of restrictions, and by any standard the Government have closed down the aviation sector completely,” Mr Provan said.

READ MORE: Glasgow Airport flags material uncertainties as crisis deepens

“We also recognise that we are likely to be the last ones coming out of this, and it could be summertime before we come back out. There has to be some recognition this is a business that can no longer afford those costs.”

He added: “We are calling on the Government to speak to us, engage with us, and help us create a plan to come out from this for the longer term, and to provide now the lifeline we need from a cost perspective.”

Mr Provan said aviation’s struggles have been evident in recent days in the exit from long-haul flights by Norwegian as it bids to survive, and the closure of Exeter and Newquay airports. Airports are costly asset bases to maintain, which is extremely difficult when activity is so limited.

“We are unable to do that, so we need that financial support now just to ensure this country has an aviation sector moving forward,” Mr Provan said. “We are an island nation. I’m not quite sure how you plan to globally trade if you don’t have aircraft that can take people from point A to point B.”

Although the route out of the pandemic remains uncertain, Mr Provan is clear about what Government needs to do.

As well as emergency financial aid, he argues that the UK and Scottish governments must “finally” recognise the importance of aviation to the economy. If they wish to restart this economy, they have to make it simple for people to travel,” he said.

READ MORE: No deal Brexit leaves crucial Scots financial services sector out in cold

“We recognise the quarantine and all the measures in place are necessary, but what we have not seen from government is any plan in how we come out of this moving forward. Any plan that still has quarantine is a lockdown or travel ban for the industry.”

He added: “As part of the plan, we need to see the abolishment of Air Passenger Duty for a time, so there is not unnecessary cost being put back into the consumer when we are trying to restart the industry.”

“The Government have repeated numerous times on both sides of the Border that they recognise how important aviation is, but their words and their actions just don’t match.”

Mr Provan expressed frustration at the habit of Government ministers of leaking policy changes in the press shortly before their introduction, and giving the industry very little time to prepare. And he is exasperated that, despite repeated calls from AGS, mass testing of passengers has not been brought in as a way of keeping routes open.

Quoting government data, he said: “Quarantine is at worst 20% effective, and at best 65% effective. The vaccination is currently projected to be 73% effective with protecting someone from getting the virus, but [there is] still no understanding whether or not you still spread.

“But we know that testing is 97% to 99% effective, therefore we think it is clear testing is the safest way to handle this pandemic moving forward. We think that there should be mass testing across the country.”

READ MORE: Glasgow Airport boss calls for mass testing

Mr Provan said air travellers should be tested pre-departure. But he notes that can only be effective if there are bi-lateral deals between the UK and other countries, setting out agreement on what kind of tests should be used, how travellers are treated if they test positive, and how to cover the costs for people required to quarantine.

“Up until this last complete lockdown, we had no idea whether anybody coming into the country were carrying the virus or not,” he said. “There was no test on them whatsoever.”

All three AGS airports in the UK have served as national testing centres, and have now installed capability for pre-departure testing, using both the PCR and antigen tests.

But as long as aviation remains closed, the pressure on airports and airlines that are relying on increasing levels of debt to survive is only going to rise.

And even when it re-opens, the challenges will not disappear. To pay down the debt they have incurred, Mr Provan said airlines have a choice between putting up prices or passing higher costs down the supply chain.

With price rises unlikely in his view, Mr Provan said that “as part of the supply chain, our profitability will lower at the same time as our expenses are increasing.”

The ability of airports to recover and play a role in Scotland’s economic recovery will also be challenged by the contraction and consolidation that is now taking place across the industry. That has seen airlines cancel orders to update their fleets and scale back the number of destinations they operate.

“For us, 2021 financially is likely to be very similar to 2020,” Mr Provan said. “2021 isn’t a recovery year for us, in any shape or form. It is purely a transition from crisis to recovery,

“It will be 2022 before we recover, and it will be 2025 before we would even get to 2019 levels. But there is a big assumption in that, and that assumption is that all the airlines that we had in 2019 are still going to be around in 2025. And that is highly doubtful.”

Six Questions

What countries have you most enjoyed travelling to, for business or leisure, and why?
Vacations are almost always in Europe and family holidays are often in the Canaries or Balearics, they have the perfect combination of weather and relaxation.


When you were a child, what was your ideal job? 
I always wanted to be a professional footballer and that dream stayed with me into my early teens. Unfortunately, I didn’t make the grade and I started my career in the Fire Service.


What was your  biggest break in business?
My role as managing director of Aberdeen International Airport was my first opportunity to lead my own business and one that I look back on fondly.


What was your worst moment in business?
The terrorist attack on Glasgow Airport in 2007, which was terrible.
 
Who do you most admire and why?
I have had the privilege to work with many fantastic people in my career, 
all of which have the quality of authenticity. That is a characteristic 
I really admire in my business and also my personal life.


What book are you reading?
My current book is Think Like A Monk by Jay Shetty.
It is brilliant and helps put some much-needed perspective in life during these crazy times.