The UK vote to leave the EU sent shockwaves across Europe. Ian Taylor assesses the industry’s reaction, Ian Taylor assess the industry’s reaction
Industry leaders insisted nothing will change for the time being in the travel sector but admitted uncertainties about consumer demand, regulatory issues and profits.
Leading companies said they expect limited impact on their businesses, although they acknowledged a fall in sterling’s value could hit UK holidaymakers in resort and Tui expressed concern about the impact on consumer sentiment.
EasyJet followed IAG in downgrading its trading forecast, although the budget carrier blamed this chiefly on cancellations due to continuing strikes by French air traffic controllers. However, the airline forecast a fall in revenue per seat this summer due to “economic and consumer” uncertainty following the referendum.
Airline association Iata suggested “the number of UK air passengers could be 3%-5% lower by 2020” and carrier BMI Regional said it may consider moving its base from the UK.
Abta warned of “a period of uncertainty”, but said: “In regulatory terms, we won’t see any immediate changes. Once the UK formally notifies the EU of its intention to leave, the remaining member states will have up to two years to offer the UK a deal for a future trading relationship. This can be extended if all parties agree. Until this process is resolved, everything will remain as it is now.”
The association added: “Abta will be working with the government to raise awareness of the priorities for travel businesses and UK travellers. We started this process some months ago with a programme of engagement with Leave campaigners in Westminster, and we’ve prepared a detailed list of policy and regulatory priorities.”
IAG downgraded its profits forecast, saying: “While IAG continues to expect a significant increase in operating profit this year, it no longer expects to generate an operating profit increase similar to 2015.” However, the group said: “IAG believes the vote will not have a long-term material impact on its business.”
EasyJet expressed similar confidence, saying the referendum result “will not have a material impact” on strategy or “long-term earnings growth”.
It said: “EasyJet has been preparing for this eventuality and working on a number of options. EasyJet’s initial focus will be to accelerate discussions with UK and EU governments and regulators to ensure the UK remains part of the single EU aviation market.”
Tui Group chief executive Fritz Joussen said: “We trust the UK government will take all steps to ensure economic and political stability and to ensure holidaymakers will not be affected. We are well prepared and confident Tui Group will not be significantly affected.”
But he added: “It remains to be seen how the decision will affect consumer sentiment.”
UKinbound chief executive Deirdre Wells described the result as “disappointing”, warning it would have “far-reaching consequences for our members”. But she said: “We’ve proved time and again we’re a resilient industry. The government must now work hard to secure a deal that supports our industry.”
Heathrow issued a statement saying: “Anyone at the airport will find it operating normally.”
Andrew Swaffield, chief executive of Monarch Airlines, whose parent firm Monarch Holdings is reported to be seeking £35 million in funding, said the uncertainty caused by Brexit meant finding financing from a firm other than owner Greybull was “probably less likely to happen, frankly”.
BMI Regional chief executive Peter Simpson said: “The uncertainty will add a layer of complexity. We see sizeable opportunities for BMI Regional to continue our pan-European growth, but if the dynamics that unfold prove too challenging, we may have to review this.”
Jason Geall, vice-president and UK general manager for American Express Global Business Travel, said: “Nothing is going to change overnight. It’s incumbent on travel management firm to help customers navigate through this period and to simplify any complexity.”
Sunvil group managing director Chris Wright said: “Business will continue as normal and bookings already made won’t be surcharged at Sunvil. The key message is to encourage consumers to take advantage of the best prices.”