A British vote to leave the European Union later this week (so-called Brexit) would open a can of worms on the bilateral air rights front and create much confusion, aviation analysts say.
EU open skies agreements have helped air travel expand, and if Britain pulls out (the referendum is on Thursday), it would create uncertainty for British and other EU airlines.
By creating the single aviation market in the 1990s, the EU allowed the region’s airlines unrestricted access to EU skies. Traffic growth doubled in the first four years.
Airlines are divided about how Brexit might affect them. The vote itself is neck-and-neck, with 44% of voters saying yesterday they will vote to remain in the EU and 44% saying they will vote to leave it. That’s according to the Financial Times “Poll of Polls” a summary of opinion polling on the matter.
Just last week, the FT Poll of Polls showed a strong swing to the “leave” camp, with 48% saying they wanted Britain to leave the EU, versus just 43% saying they would vote to remain. The murder of British Labour MP Jo Cox in the street last week, by a fanatic with a reported history of mental illness, caused campaigning on the issue to be suspended.
Cox was a strong supporter of the “remain” camp, and her shocking death is thought to have boosted that cause, with sterling steadying almost immediately after the tragedy. When campaigning and polling resumed, support for Brexit had dived.
On another tangent, news that controversial US politician Donald Trump supports Brexit has not helped the “leave” cause. Trump is not popular in Britain. Footballer David Beckham has come out in favour of remaining in the EU. Beckham is very popular.
Ryanair chief Michael O’Leary said recently that any decision by Britain to leave the European Union would push down airfares in the short term. O’Leary said Ryanair, on some counts the world’s largest carrier in terms of international flights, would move some investment out of Britain if it votes to leave the EU.
Ryanair’s prime hub is London Stansted Airport. It flies 40 million of its 100 million-plus passengers a year to and from the UK.
The outspoken O’Leary, who is campaigning for Britain to stay in the EU, estimates Brexit would push down airfares for “six to 12 months” but fares might then rise sharply if leaving the EU threatened Britain’s access to EU air services agreements.
Willie Walsh, chief executive of IAG, the company which owns British Airways, Iberia and other airlines, says any decision by Britain to leave the European Union would have no “material impact” on the business. See: UK leaving EU would have little impact on airlines
UK-based easyJet has also campaigned for Britain to stay in the EU.
One easy way out, involving the minimum disruption if Britain votes for Brexit, would be for Britain to agree access to the European Common Aviation Area, which comprises all EU member states, plus some non-EU states including Norway, Iceland and Albania.
That, IATA chief Tony Tyler told Airwise.com, would be a plausible outcome and would likely ensure ther would be little impact “but nobody can make predictions”.
Several other outcomes are possible. We will know by the end of this week, though pundits, and bookies, still say the most likely outcome is that Britain will vote to remain in the EU.
Written by Peter Needham