IATA reveals industry uncertainty
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.”