European carrier chiefs are stressing the importance of ensuring that the benefits from a liberalised and deregulated aviation market are not lost following the recent UK Brexit vote, but insist the sector is well placed to deal with the short-term challenges.
Economic uncertainty followed the surprise Leave vote in the 23 June referendum on the UK's European Union membership. Share prices, particularly on the London FTSE 100 market, were sharply down in the first two days of trading after the result – with airline stocks among the hardest hit – while UK currency sterling slumped to its lowest level for years.
EasyJet and IAG have both clipped profit expectations for the year – though they cite a number of other factors alongside the possible impact from market volatility following the Brexit vote.
Speaking during a CEO Summit organised by new lobby group Airlines for Europe in Brussels on 28 June, the chief executives of these and other European carriers all played down the long-term impact resulting from Brexit – as long as the UK struck a new aviation deal with the EU.
"Nothing will change overnight," said EasyJet chief executive Carolyn McCall. "Much depends on the new agreement the UK will reach with EU member states. The aviation industry knows how to overcome challenges and deal with change, and that is exactly what we will do.
"A4E believes for the consumers the most important thing is they continue to receive the benefit of the current liberalised and deregulated aviation market.
"The fundamentals don't change," she adds. "We are going through a bit of turbulence. It is a short- to medium-term issue and we will all find a way through it."
Ryanair boss Michael O'Leary – a high-profile advocate for Remain in the recent referendum – says: "The UK will do what the UK will do. But the airlines, whether it's in Iceland with volcanoes or 9/11 or Brexit, will work a way round it."
IAG chief executive Willie Walsh is similarly pragmatic: "Life goes on, and we just get on and do it. ATC stoppages mean I can't move my customers – the vote on Thursday doesn't stop me."
Bjorn Kjos – who leads Norwegian, which became one of the first carriers to join the new grouping after it was launched by Europe's five biggest airline groups – adds: "Long term, if you can have the UK… have open sky with everyone else, it will be benefit for everyone in the industry."
He notes that the biggest problem had so far been felt by shareholders. "The only shock is for the owners. It's not been very good to be a shareholder in these last hours," he says. But he points out that the lower value of sterling brings an upside for travel into the UK.
"It will be cheap to go the UK, so that means it's highly likely you will see more people travelling to the UK," says Kjos, whose carrier has a strong presence at London Gatwick airport.
Neither does Ryanair's O'Leary see a slump in demand on routes linking central and eastern Europe with London – a market the low-cost carrier has grown sharply. "I don't think there is going to be any dip or decline in the number of central European passengers flying to the UK post-Brexit," he says, noting that Irish, Polish and Latvian people will still to be needed to work in London.
Walsh adds: "I can understand why there is uncertainty. But does anybody seriously believe anyone is going to stop flying? I don't. People are not going to stop flying because of the vote last Thursday. They are going to continue to fly into and out of the UK.
"So I'm disappointed by the result." But Walsh reiterates McCall's earlier point: "The fundamentals of the business have not changed. There is some short-term turbulence, but ultimately things will settle down.
"From an aviation point of view we believe the consumers will continue to benefit from a liberalised, deregulated aviation in Europe, and I think everyone here [A4E airline leaders] would expect that to be the case going forward," says Walsh.
Source: Cirium Dashboard