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11.12.2018
Assessing the Impacts of Brexit on UK Aviation Industry!
Terminating over 4 decades of a lot more than an economic alliance, Britain’s divorce from EU is due to complete in little more than 4 months. However, as we approach the climax of a rather turbulent divorce, the terms of the divorce are still not clear, as we hear no definite guarantees or agreement on various hot issues; among which aviation rights also lies in mist.
Although a transitory period stretching from the Brexit date (March 29, 2019) to January 1, 2021, has been allotted as a reprieved period; that can’t overshadow the mist of uncertainty over various issues.
Uncertain Brexit Agreements - Impact on Travel Opportunities:
Uncertainty always has negative impacts on businesses and the impacts of Brexit agreements on aviation industry will only truly be revealed with time. However, what we could say is that any hindrance to UK airlines operability in the European Union will result in weakening connectivity and lost business travel opportunities. This is because, while at the surface a queue or fee might not seem to be that big of a problem, however, when expanded across thousands of business travels, this can escalate quickly to mammoth numbers.
Brexit – The Unanticipated Benefits
Looking beyond the negative aspects, the addition of Visa requirement might just bring some unexpected benefits for UK economy.
According to statistics, 33 percent of business travellers to the UK from outside EU actually extend their stay in the country beyond the business purpose. The numbers remain at 12% for business travellers from EU member states.
Among the various other factors that might have added up to the over-stay of business travellers, the sense of capitalizing the business trip for leisure purpose with a visa requirement was one of the main factors.
Nonetheless, business travel is a significant economic aspect for both parties; one with mutual benefits and it’s only sane to keep it as open as possible. That’s one reason why the authorities are working to work out a rational agreement on “comprehensive deal on air services”.
Brexit – UK Knocked-Off from Top Position
UK has remained one of the top preferred business travel destinations from EU member states; that was until 2017. According to the latest statistics, over 70 financial services companies with overseas operations located in the UK are actually looking to relocate their operations to elsewhere post-Brexit.
Apart from losing business operations in the UK, the aviation restriction could also mean that large European Congresses which took place inside the UK will now be shifted to a new location in mainland Europe.
Not All is Gloomy
Not all is gloomy for UK businesses though as some of the largest businesses have pledged their continuous presence and even increase in operations inside UK post-Brexit. Amongst them, Google pledging £1-billion for London Headquarter as well as Bloomberg’s £1-billion pledge for European HQ is much significant.
“To say the least, for most businesses Post-Brexit will remain business as usual, however, the government would need to pursue a pre-emptive policy to counter the negative impacts of Brexit on aviation industry”.
Abdul Aziz Lang
Over 28 years’ experienced professional in leading multinationals across diversified industries internationally. Strategic Planner, Finance Head and Busienss Leader. Change Agent, leader for…
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