With Britain voting to leave the EU, the number of British air passengers could be 3-5 per cent lower by 2020, driven by the expected downturn in economic activity...
With Britain voting to leave the EU, the number of British air passengers could be 3-5 per cent lower by 2020, driven by the expected downturn in economic activity and the fall in the sterling exchange rate, the International Air Transport Association (IATA) said on Saturday.
The near-term impact on the British air freight market is less certain, but freight will be affected by lower international trade in the longer term, the Association said in a report.
“There were 117 million air passenger journeys between the UK and the EU in 2015. Air links facilitate business, support jobs and build prosperity. It is critical that whatever form the new UK-EU relationship takes, it must continue to ensure the common interests of safe, secure, efficient and sustainable air connectivity,” said IATA Director General and CEO Tony Tyler.
Uncertainty remains regarding the precise detail of the exit as it could be two years or more before these issues are fully resolved. “Prolonged uncertainty will influence both the magnitude and persistence of the economic impacts,” the report said.
The impact of weaker sterling on British air traffic is likely to be relatively muted, it said.
The report said the weaker exchange rate is expected to stimulate inbound demand to Britain to a greater extent than it deters outbound trips.
As a result, despite inbound traffic accounting for a minority of traffic in the entire market, this will, in part, offset the negative impact on outbound travel.
The association envisaged the big issue would be with aviation regulation.
“The more protracted the process of agreeing new terms between the UK and the EU, the greater the negative impact on investment and many other types of activity,” the report said