IATA re­veals in­dus­try un­cer­tainty

7 Days in Dubai - - BUSINESS - Writes Ma­hak Man­nan.

The In­ter­na­tional Air Trans­port As­so­ci­a­tion (IATA) says the UK’s de­ci­sion to leave the Euro­pean Union has “trig­gered much un­cer­tainty” and has called for a new frame­work to be es­tab­lished be­tween the two par­ties.

In its pre­lim­i­nary anal­y­sis of the fi­nan­cial and eco­nomic im­pact of the Brexit de­ci­sion, IATA Director Gen­eral and CEO Tony Tyler says it is crit­i­cal that the UK-EU re­la­tion­ship must con­tinue.

“The Brexit vote has trig­gered much un­cer­tainty - fi­nan­cial and oth­er­wise,” said Tyler.

“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. Air trans­port plays a ma­jor role in mak­ing that pos­si­ble.

“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.” The UAE will still re­main an at­trac­tive des­ti­na­tion of choice de­spite UK tourists ex­pect­ing to travel to coun­tries of­fer­ing bet­ter value af­ter the Bri­tish pound hit a 30-year low last week, Fol­low­ing the UK’s ‘leave’ vote in the Euro­pean Union ref­er­en­dum, the out­look for the tourism in­dus­try cur­rently looks volatile, ac­cord­ing to the As­so­ci­a­tion of Bri­tish Travel Agents (ABTA). Speak­ing with 7DAYS, an ABTA spokesper­son said: “With the un­cer­tainty the sit­u­a­tion has cre­ated, we ex­pect trav­ellers to strate­gi­cally pick des­ti­na­tions where the pound is stronger when choos­ing to go abroad.” Ac­cord­ing to a sur­vey of 6,000 peo­ple con­ducted by com­parethe­mar­ket.com, 40 per cent of UK adults said they feel less fi­nan­cially se­cure as a re­sult of the EU ref­er­en­dum. The sur­vey also stated that more than one in 10 UK adults are less likely to book a hol­i­day to Europe due to the weak­en­ing pound. “There are coun­tries where the cur­rency is

IATA’s re­port also stated that con­sid­er­able un­cer­tainty re­mains re­gard­ing the pre­cise de­tail of the exit and 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. Pre­lim­i­nary es­ti­mates from IATA sug­gest that the num­ber of UK 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 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.

Another big is­sue ac­cord­ing to IATA 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. Over the longer-term, how­ever, there will be an im­pact on in­ter­na­tional trade when the UK does for­mally exit the EU and this, in turn, will af­fect air freight. For ex­am­ple, it is es­ti­mated that UK trade vol­umes could fall by 10-20 per cent in the long run. do­ing worse than UK right now, mostly in South Africa, those will be at­trac­tive des­ti­na­tions for trav­ellers,” the spokesper­son said. A 50 per cent in­crease is also ex­pected in allinclu­sive hol­i­day pack­ages. How­ever, Dubai still re­mains to be the top des­ti­na­tion for UK tourists com­ing to the re­gion fol­lowed by Turkey. “Cur­rently book­ings to Dubai are up year on year and book­ings for next year are very healthy,” said the ABTA spokesper­son. “But there is quite a strong cor­re­la­tion be­tween the strength of Ster­ling and book­ing lev­els, so a weak pound could well im­pact on fu­ture book­ings.” Iain Andrew, of Dubai-based Dnata, said: “I think now there will be a greater em­pha­sis on value for money. “In gen­eral, travel will be­come more ex­pen­sive for the UK trav­eller, but I be­lieve the UAE of­fers great value at different bud­gets, and will re­main a de­sir­able des­ti­na­tion.”

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