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Brexit: UK air passengers could be 3-5% lower by 2020, says IATA
The Brexit vote has triggered much financial uncertainty and otherwise as leaders in the United Kingdom and European Union are working to establish a new framework for their relation.
Consequently, the International Air Transport Association (IATA), the clearing house for over 260 airlines has released preliminary analysis of the financial and economic impact of the Brexit decision on the air transport industry.
Director-General of IATA, Tony Tyler in a statement said the Brexit vote has triggered much uncertainty—financial and otherwise, adding that as leaders in the UK and the EU work to establish a new framework for their relationship, one certainty to guide them is the need and desire of people on both sides of that relationship to travel and trade.
To him, air transport plays a major role in making that possible, stressing that 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 Tyler.
The UK voted to leave the EU – the so-called ‘Brexit’ scenario. Considerable uncertainty remains regarding the precise detail of the exit and it could be 2 years or more before these issues are fully resolved; prolonged uncertainty will influence both the magnitude and persistence of the economic impacts.
Preliminary estimates suggest that the number of UK air passengers could be 3-5% lower by 2020, driven by the expected downturn in economic activity and the fall in the sterling exchange rate. The near-term impact on the UK air freight market is less certain, but freight will be affected by lower international trade in the longer term.
A big issue is with aviation regulation. The UK faces a trade-off between accessing the European Single Aviation Market and having the policy freedom to set its own regulations.
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