The Aerospace and Defence industry is one of the European Union’s (EU) key high-tech sectors in the global market supporting more than 865.000 (figures for all sectors) highly skilled (direct) jobs in Europe. It is, as such, an essential part of European mobility, security and defence capabilities, and of its economy.
The spread of the COVID-19 virus is creating an unprecedented crisis. Whereas all Aerospace and Defence Industries Association of Europe (ASD) sectors (civil aviation, defence, space and security) are affected, the worldwide civil aviation sector, including the European civil aerospace industry are among the sectors worst affected with its survival even at risk.
Entire aircraft fleets have been grounded as result of the drop in demand due to the efforts to combat the spread of the virus. According to EUROCONTROL, air traffic in Europe on 24th March 2020 had dropped by 77% with 21,254 flights less than last year. At the same time, air transport services are continuing to play an essential role in combating the COVID-19 crisis through ferrying of people in critical conditions, repatriation of nationals and shipment of goods including medical supplies.
Wherever possible, some ASD members have also used their own aircraft to provide support for urgent shipments. According to the International Air Transport Association (IATA), the airlines worldwide will lose 252 billion US$ in revenue, which puts the survival of the entire airline sector at risk. Other (non-airline) aircraft operators have been grounded as well and will also require financial support. Without such emergency aid for aircraft operators, there is a risk of widespread bankruptcies which would create immediate and devastating financial impact on other parts of civil aviation value chain such as the EU civil aerospace industry.
The European civil aerospace industry itself has also been heavily directly impacted by the COVID-19 crisis resulting in production cuts, supply problems, production delays, aircraft delivery delays and cash-flow problems. The European aerospace industry - in particular companies including SMEs providing critical functions in the aerospace supply chain - will therefore also need specific support measures similar to those envisaged by non-EU Governments, such as the USA, and beyond the support measures for airlines and aircraft operators.
ASD, as the voice of the European Aerospace and Defence Industry, therefore, calls on the EU Institutions and worldwide Governments to provide specific support for the entire civil aviation sector with specific emergency aid to be implemented with utmost urgency beyond support measures for all other sectors. This is essential to allow the civil aviation sector to survive the COVID-19 crisis. A collapse of this sector would not only have a devastating impact on the wider economy, it would also severely damage Europe’s defence industrial base, as many aerospace companies are also key suppliers of cutting-edge equipment to our armed forces. The stakes are not only economic, but also strategic. Beyond financial aid, there is also a need to provide relief on various technical/regulatory issues and a stronger crisis management coordinated at European level.
While the need for financial and other support is clear, ASD also believes that the agreement on specific governmental support measures for the civil aviation sector will require a strong coordination at both a European and international level. This is essential to ensure that governmental support remains linked to losses incurred due to the COVID-19 crisis and to avoid distortion of competition.
ASD also recognises everyone working to maintain production and to support critical assets in the Aerospace and Defence industries.
Last but not least, ASD wishes to express its solidarity with all people who are struggling to save lives and defeat COVID 19. European Aerospace and Defence companies have joined the battle and, wherever possible, are also using their manufacturing capabilities to produce medical equipment, such as oxygen generators and other supplies urgently needed. A strong Europe is needed more than ever. With proper European support measures in place, the industry will able to recover and continue playing a strong role for European mobility, defence, space and security to the benefit of Europe and its citizens.