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Brexit Consequences for the Airline Business

On June 24th the UK Referendum on EU membership delivered something of a shock with its “leave” decision.  On the day of the “Brexit” decision  the pound went into freefall  against the dollar and the euro.  For UK airlines this brought about immediate cost increases as important expenditure items such as jet fuel and aircraft leases are denominated in dollars.

It’s also brought a number of big uncertainties which airlines are currently analysing.  With UK buying power in dollars and euros currently reduced, the big question is what will that do to demand? The UK outbound market to Europe and the US is one of the largest, will people tighten their purse strings and travel less? Will capacity have to be cut or put to use elsewhere?

Several airlines including IAG (parent of British Airways) and easyJet have issued recent profit warnings, to which Brexit uncertainties have contributed.  Others such as Ryanair and Wizz have indicated they will switch aircraft that had been earmarked for the UK to other markets.  Delta Airlines has said it will trim UK-US capacity this winter.  Summer season 2017 will be the real acid test as to how this is all going to play out.

Meanwhile, Brexit aside, there continue to be further challenges from terrorism attacks and political upheavals from attempted coups in Turkey to speculation about the upcoming US elections.

As ever there will be plenty to discuss with our now announced guests for this year’s WTM London airline sessions: President of Emirates, Sir Tim Clark on Monday 7th November and Pekka Vauramo, CEO of Finnair on Tuesday 8th November. Click here for more information.

…and guess what…we may even have news of a Government decision on a new London runway too.  All the more important in a post Brexit world!

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