Brexit: A dog’s dinner?
That famous British stiff upper lip wobbled more than slightly last week, as we witnessed jaw-dropping displays of emotion in one of the world’s most reserved nations. After a week where the Prime Minister’s resignation only made third place on the news pages, party leaders are falling onto their swords following a knife edge vote to exit from Europe – and leaving the UK with a lot on its plate.
As the dust settles, some of the great and the good of the European business aviation industry have been kind enough to offer their thoughts on what’s left on the menu for operators now.
Siegfried Axtmann, CEO of Germany’s FAI Rent-A-Jet, tucks into the heart of the matter: “The UK will probably end up with the same status as Switzerland,” he says, ”which means holding a full EASA membership, but with some restrictions on flight operations within the EU.”
Also read: FAI predicts business as usual
Meanwhile, Luxaviation CEO Patrick Hansen adds spice to this theory, saying: “Switzerland is also not part of the European Union, yet it is part of EASA. And with the immense traffic between UK and the European Union, combined with the lobbying powers of the major airlines, I believe there is a huge chance that the UK will remain part of EASA, and also part of the single European Aviation market. As active members of the European Business Aviation Association, we will also participate in actively lobbying to this effect.”
George Galanopoulos, managing director of UK-based London Executive Aviation (LEA), sees the change happening in bite size pieces. “The immediate impact is going to be on charter demand. Until the economic uncertainty eases, we’re expecting to see people holding back from flying as much. Longer term, the regulation of aviation is obviously a hugely complex issue to unpick and will take years to work out, but nobody expects that UK operators won’t continue being able to fly in continental Europe.”
Must-read: Consolidation is the way
Swiss operator Vertis Aviation’s British COO Neil Turnbull sinks his teeth into the legal side of the equation: “Until the question of whether the European open skies policy remains in place is answered, there is little we can do to predict how overall business will be affected. The fundamentals of business will all need reassessing – currency exchanges, training, existing regulations, ability to operate within Europe – but the wider effects of policy changes are most likely to have the greatest impact.”
However, these fundamentals and their possible negative effect on employment is leaving a nasty taste for British charter broker PrivateFly’s CEO Adam Twidell: “Crews, pilots and other staff are typically multi-national in our industry and naturally mobile. How easy will it be for UK crews to work for EU operators and what impact will differing employment legislation have on the desirability of working for British operators? We place a high value on language skills and recruiting team members with European culture and experience.”
Also read: PrivateFly goes for broker
He points out that since the market in Europe predominantly comprises of short domestic point-to-point flights in business aviation, outside of the EU, there could be a commercial impact on UK operators operating domestic routes (for instance, within France), and on EU-wide operators who would be prevented from operating domestically inside the UK. He adds, “Hopefully the UK would negotiate to remain part of the European Common Aviation Area, still keeping this open market.”
Meanwhile, the entire Brexit menu has given Oxford Airport’s business development manager James Dillon-Godfray a bad case of indigestion. “It could all have been avoided,” he says. “If fewer than 1% (to be precise 0.97%) of the population have changed their minds since Thursday, we might not have been in this mess. That’s not democracy, it’s insanity. A total of 634,751 people is all it would have taken to have changed the whole future of Europe and the UK.”
He continues: “The UK’s aviation market is the third largest in the world, but it is now in chaos, with uncertainty prevailing for two to three years. The equivalent of the annual passenger throughput of Inverness Airport has upset everything up for a nation 100-fold larger, and an economic trading zone 500 times larger.”
Just desserts, or something sweet?
After long enjoying the benefits of a strong pound, the biggest challenge for GB-based operators is the volatility in the currency exchange rates. Profitability could be limited as the GBP rates fluctuate dramatically against the dollar and the Euro. However, looking on the bright side, this could also prove to be a great opportunity for private charter brokers. “The choice of operator and where they are based, can now make a big difference to the price paid by the customer,” explains Twidell.
Swiss-based Brit Richard Koe of WingX doesn’t believe the world has gone pear-shaped. “It is absolutely true that uncertainty and associated market and currency volatility are bad for business aviation,” he says, ”but concerns for relocation of investment and economic recession for the UK look exaggerated. It’s the EU’s sclerotic recovery, which looks more endangered by Brexit. Many of the entrepreneurs who appreciate business aviation are quite sanguine. It may turn out that in two years the UK outside Europe is still the continent’s fastest growing economy. That is, if it really does leave the EU…”
Britain’s own Business Aviation Association (BBGA) head Marc Bailey also refuses to make a meal of the issue. “Obviously, the BBGA respects the will of the voters and puts its faith in the process that will ensue. We will monitor if or how this decision impacts business aviation in Europe and will continue to work with stakeholders to advocate for safe, efficient operations, and the successful growth of our dynamic sector.”
Must-read: The European question
Dillon-Godfray remains unconvinced, “You might add that those 0.97% of the UK population managed to wipe three trillion dollars off world markets in a day. I think that’s about £4.7m each. An apparent recovery in a mere week does not constitute a long term GDP trend, which almost all pundits expect to be a permanent, negative 2-3% decline…”
That said, he is British, and us Brits do tend to rally in the face of adversity. He’s nowhere near ready to drink the Kool Aid. “On a happier note,” he concludes, “We still have Hook Norton beer, Cornish beaches and Cairn Terriers. They can’t take those off us!”
With thanks to Alison Chambers of Emerald Media for help collating the quotes