HARD BREXIT TO CAUSE CHAOS, WARNS AIRLINE AUTHORITY IATA
The body is willing to provide solutions if asked, but has so far not been invited to any talks
Global airline industry body the International Air Transport Association urged the UK and European Union to quickly reach an agreement on air services management ahead of a possible no-deal Brexit. The authority warning that millions of passengers could face “chaos” at airports without a backup plan.
Flight disruptions for both passengers and cargo and a “nightmare” at airports are possible if an agreement is not reached within five months, Alexandre de Juniac, chief executive of Iata said on Wednesday.
The UK is set to leave the EU in about five months, but the parties have yet to reach a withdrawal agreement and are preparing for a worst-case scenario of a no-deal or hard Brexit.
“We predict chaos if nothing is done,” Mr de Juniac said. “The industry is not being consulted. We urgently require transparency so we can prepare after March 2019.”
Separately, Iata released its 20-year forecast that showed global air passenger numbers will double to 8.2 billion by 2037, boosted by strong travel demand in Asia-Pacific, but it warned growth could dampen by rising protectionism
Iata forecasts passenger numbers will increase by 3.5 per cent, based on compound annual growth, over 20 years, but that may be curtailed to 2.4 per cent if restrictions on free trade, such as imposing tariffs, continue in what it calls a “reverse globalisation” scenario. The industry body revised its growth forecast of 3.5 per cent down by 0.1 per cent from an earlier report, which means 60 million fewer passengers over 20 years.
Middle East airline passenger numbers are expected to rise 4.4 per cent to 501 million passengers by 2037. A global rise in protectionism could weigh on that growth forecast as well, slowing to 3.3 per cent instead.
“Passenger traffic to, from and within the UAE and Saudi Arabia is expected to grow strongly over the next 20 years, helped by favourable demographic trends,” Iata said.
“Both countries are expected to see strong growth on the passenger markets to and from India.”
China will knock the United States out of its top ranking as the world’s biggest aviation market by 2025 driven by its economic growth, higher incomes and massive population, the report showed. It will add a billion more passengers to reach 1.6bn by 2037.
The US will drop to the second biggest aviation market to reach 1.3bn by 2037 and India will jump to third place with 572 million passengers.
With global air travel demand forecast to continue growing, pressure on infrastructure will increase and governments must respond with measures to improve airports to keep up with the pace of growth, Mr de Juniac said.
The industry is grappling with a “more adverse economic environment” stemming from a rise in oil prices and recent currency crises in emerging markets,” he said.
The strengthening of the dollar, combined with a depreciation in local currencies in some markets, is hurting some airlines as they pay for certain costs in dollars but earn their revenues in local currencies.
Emerging market currencies of Turkey, Argentina and South Africa plunged recently. On Brexit, Iata said it would provide solutions if asked but, has so far not taken part in conversations.
The industry is not being consulted. We urgently require transparency so we can prepare after March 2019