Brexit is a term that became the shorthand technique of stating that UK left the European Union (EU), merging the term Britain and depart to acquire Brexit. A voting took place on 23rd June, 2016 where everyone of the age of voting participated in deciding whether UK should disappear or linger in the EU. Leave was declared the winner having attained 51.9 per cent of the votes to 48.1 per cent. The main reasons for Brexit were globalization, low wage factor, immigration and de-industrialization. In the consequences of the Brexit and while the Government of UK is still holding onto its approach, the industry of aviation is trying to predict the potential outcomes. The effects of Brexit would not be perceptible in the short-term, if there is any; they could be huge in the standpoint of the long run. The economy of the UK grew more than it was formerly reported in the concluding three months of 2016. The GDP augmented by 0.7 per cent, which saw an increase from 0.6 per cent, as per the Office for National Statistics (ONS). However, there are certain hints that the uncertainty of Brexit is hitting the confidence of business. As per the reports of the ONS, there has been a slowdown in the investment of business, which fell around 1 per cent as compared to the three months to the September end prior to the three concluding months of 2016. The aviation sector, if being faced with any sort of damage, would not be in near future, but in the coming three to four years. However, in the meantime, the law of the European Union would be continuing to affect UK, atleast till the early stages of 2019. Within UK, the aviation industry generally plays an important role, given the significance of the sector for the British economy (3.5 per cent of the GDP of UK). It is for obvious reasons that the government of UK would be trying its best in maintaining the admission to the single aviation market after UK leaves the European Union, enabling the business of UK in continuing to promote from the Single Market of Europe (Rosewell 2017).
Based on the context of political consequences and the issues that are pending, the new government of UK needs to address the same , though there lies enough uncertainties in the future of this industry. The aviation industry was quick to response that it witnesses Brexit as a business usual matter, the next improvements would be depending much on the political progress and with UK triggering Article 50 of the European Union. One of the areas that are clearly at risk from the break-up of Britain with Europe is the research programs that are publicly funded. Brexit would be bringing an end to the nation’s most flourishing association in Clean Sky, the EU’s public-private aviation program of research.
One of the other awaiting questions to the European Aviation Safety Agency (EASA) is the general role for complementing safety issues, airworthiness and regimes of certification across the member states of EU. Following the UK’s vote in leaving EU, the EASA conjectures whether the agency will be losing out on one of its naissance members. This would considerably be impacting the aviation industry of UK. ADS, the trade body for the UK aerospace, recognize it would be taking around 10 years for the civil aviation of the country in creating the significant infrastructure of certification. Holding discussions with EASA would be vital in helping shape the future policies and ensuring that the UK aerospace manufacturers would be designing the products conforming to the incoming and new principles. As per Lyons, Reader and Stephan (2016), for the purpose of preserving the industry and mitigating the impact of Brexit, UK might be having no other choice but to negotiate a fresh UK/EU aviation conformity, joining ECAA as the autonomous signatory with individual (non-EU and EU) countries.
In case of the traffic rights, UK in the present scenario would be benefitting from the rights of the traffic negotiating at the European level. Thereby, UK owned airlines with EU carrier category would be able to function on similar sort of terms as it presently benefits, it is highly probable for UK featured airlines being forced themselves somewhere else in benefitting from certain liberty. All these elements would be cautiously conversed, once the present Government bring in more lucidity about the objectives in the coming negotiations for the UK-EU breakup.
Long meetings have been taking place between the officials of EU and the airlines after Brexit in a proposition to flesh out the subjects that needs to be dealt with for the purpose of travel (Deane 2016.). There has been an escalating concern from the industry of airlines that it could be shuffled if the discussions between the EU and UK turn rancorous. The issue of Brexit is predominantly acute for the industry of airlines given obtainable agreements facilitating the companies in flying between UK and EU, as well as flanked by mainland countries of Europe, with these being re-negotiated before UK makes a formal exit through the bloc.
Opinions polls are disreputably unstable and unpredictable predictors. In particular, a certain risk is the pioneer of participating in the ‘close economic cooperation’ of the ECAA with the EU, signifying that a broader configuration with the economic policy of EU. Brexit impacted in a negative way to the low-cost carriers of UK, particularly EasyJet that ahs bases and routes across all the destinations of Europe, majority of all those do not touch UK in any sense (Miller 2016). Without much of the sturdy bilateral admission, it stands unclear whether EasyJet would be facilitated in persisting with the persistence being an entity. This would bring down huge disaster for the Easy Jet, particularly if it is being accompanied by a bilateral indecision.
Brexit effects have been a bit mix for the full service carrier of UK like the British Airways, as it mainly focuses on the longer routes of distance from the Heathrow airport in London that would in all probability be preserved outside the ECAA. The British Airways is mainly dependent on the business travel that could undergo in the wake of an expected recession pro-Brexit (mainly on the European network). Brexit has the ability in causing plenty of harm to the full service carriers of Britain. One of the saving graces for the airlines industry is that Britain would be able to discuss more mutual agreements in curtailing for the Middle-east Big 3.
Expanded indecision related to Brexit would be having economic impacts. Households and businesses in all probability would be delaying in spending given that the future is uncertain. There has been a fall in the stern value; the UK residents would be finding outbound travelling more expensive. Within 2020, the number of passengers of UK could be gradually lowered by 3-5 per cent related to a scenario of no Brexit, obsessed by the predictable slump of economic activity and the fall in the authentic exchange rate (Strom 2017). Although the short-term authority to the freight market of UK has been less certain, freight will surely be exaggerated in the long term by the lower international trade. Certain estimates have been suggesting that the UK trade volumes would be down by atleast 10-20 per cent within 2030.
Reference:
Deane, P., 2016. Stimulating the uptake of liquid biofuels in aviation through existing renewable energy support schemes. Policy, 6.
Lyons, B., Reader, D. and Stephan, A., 2016. UK Competition Policy Post-Brexit: In the Public Interest?.
Miller, V., 2016. Brexit: impact across policy areas.
Rosewell, B., 2017. Infrastructure, policy, and Brexit. Oxford Review of Economic Policy, 33(suppl_1), pp.S113-S123.
Strom, M., 2017. European Union Competition Law Developments in the Aviation Sector: July to December 2016. Air and Space Law, 42(2), pp.215-240.
