Britain's vote to leave - what are the consequences airlines face?
Monday, June 27, 2016
The aftermath of last week’s historic referendum has taken full effect and with it, political and economic change is set to ensue.
With roughly 250 Million passengers per year, the UK is the largest airline market in Europe. The impact of the Brexit (a British exit from the EU) was felt immediately.
On Friday, the International Airlines Group’s (IAG) stock market value dropped significantly. Major carriers such as easyJet (roughly 25%), Ryanair (roughly 15%) and Lufthansa (roughly 10%) had to face decreasing market value.
Impact for low-cost carriers
The common aviation market, and with it unlimited access to EU airspace, has greatly benefited low-cost airlines. In particular UK carriers such as easyJet, who rely heavily on common access to European airspace as a key part of their growth and expansion strategy.
Thursday's vote has therefore raised questions as to the future of UK-based airlines.
“We shouldn’t overestimate the impact of a Brexit either.“ stated easyJet CEO Carolyn McCall before the decision, assuring the public of their contingency plan.
"We are long active all over Europe and have established admissions in several European countries.”
These admissions in other European countries and also in Switzerland, who has a special treaty with the EU, will now gain relevancy within the company.
Regardless, the airlines are trying to get a new agreement for the UK with the EU to the top of the negotiation’s list.
“We sent a letter to the UK and EU government today asking to set Great Britain’s stay in the EU-aviation market on top of the list.”, so McCall on Friday.
Michael O’Leary, head of the Irish carrier Ryanair, is more skeptical towards the effects of the Brexit. Although an Irish company, Ryanair has its biggest base in the United Kingdom and has, in preparation of the referendum, been supporting the remain campaign. They had, amongst others, offered cheap flights for expats so that they would come home and vote for a stay of the country in the European Union.
Ticket prices may go up
UK travellers are going to be the first to remark a rise in ticket prices. This has been acknowledged by O’Leary already on Friday afternoon.
By leaving the EU and possibly also the ECAA, Great Britain will have to renegotiate the economic competition with the remaining states and the UK.
Furthermore, European air passenger rights, that have until now also been valid for UK passengers, are now in the balance.
Written by: Team Flight-Delayed.co.uk
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