Introduction
In this report a complete adamantine study has been prepared over the UK decision to Leave EU regional block. EU states for European Union which is consisted with 28 member countries minus UK and Croatia. In this study, analyzed has been prepared to identify the impact of referendum of UK on airlines industry. in addition, here impact of Rayanair, Virgin Atlantic and Easy jet have been analyzed companies such as Referendum of UK could be defined as decision of resident of people of every age to provide consensus regarding whether UK should leave EU regional block or not. This decision is accompanied with several benefits and losses to UK and EU at large as well. Nonetheless, a complete study has been used in this report to divulge the true impact of referendum of UK on aviation industry.
Body context
Initiative, referendum and recall are the three powerful powers to enable the voters to purpose or repeal the legislation to remove an elected official from dignity. In the politics of United Kingdom it has been observed that process of referendum of UK to leave will results into placing new legislation on proposed ballot or to determine the legislation that has been passed by legislation on ballot for particular vote.
Impact of UK referendum on UK air industry
Referendum is UK was the biggest decision in which several persons (all age) took part to vote on the decision of whether UK should be part of European union or not. This was the biggest dilemma to decide by resident of UK. There are several separate forces impacting the aviation industry after referendum on UK had taken into place. EU is encompasses with 28 countries apart from UK and Croatia (Tielmann and Schiereck, 2016)
The great uncertainty
After referendum on UK to decide whether to leave European Union is accompanied with several uncertainty. Nonetheless, all the European airlines did not voice their concern and predicated that there will be several negative outcomes to aviation industry of European Union if UK leaves the EU. In order identify the true impact of referendum on airlines industry a complete study needs to prepare on several big airlines companies such as Rayanair, Virgin Atlantic and Easy jet (Howorth, 2016). It is evaluated that Rayanair, Virgin Atlantic and Easy jet are the most profitable companies in airline industry. On the basis of environmental analysis, there will be two different scenario one optimistic and other one is pessimistic. It is analyzed that if UK leaves the EU then there would be seen increment in tariff rate which would reduce the global trade in EU regional blocks. It is found that if business trade is decreased then these companies will be facing high amount of decrement in their profit margin. In addition, UK will frame its own policies and regulation which will result into migration of people from country to another. As per the perception of Bouoiyour and Selmi, 2016 it is reflected that these restriction and strengthen policies of UK will pose negative impact on the business of airlines industry. In addition to this, other impact of UK referendum would be related with reduction in turnover of airlines industry from the airline business in EU regional block due to separate rules and regulation of UK. It is analyzed that most of the turnover and income of aviation industry in EU comes from import and export of goods.
Impact on selected big airlines companies
It is identified that all the members countries in EU are indulged in developed their business at zero Tariff rate. However, after the referendum of UK on 23rd June it could be easily seen that balance of trade of other countries have significantly down due to separate tariff and trait proposed by UK government. By analyzed various article it is identified that net effect of referendum of UK to leave EU will be negative on aviation industry as it will result into decline of premium and outbound traffic of airlines. In addition, as per the perception of Howard and Kollanyi, 2016 it is observed that UK is one of the largest traders having its export of $ 506 billion and increased its imports of $ 684 billion in 2016. It is further evaluated that more than 40% of these exports and exports of goods and services is traveled by air. Afterward, the referendum of UK to leave EU has resulted into several changes in its foreign trade policies and measure and increment in trade tariffs and traits of country. Aviation industry will be facing negative downfall in its total turnover due to reduction in import and export of all the members’ country of EU. There are several companies such as Rayanair, Virgin Atlantic and Easy jet who have suffered high amount of pressure on their revenues, yields and profit. These companies also predicted that referendum of UK from EU will surely result into negative impact of their set long term goals and objectives. The share price of these companies have seen drastic downfall which could be easily evaluated by analyzing their annual return. In addition to this, aviation industry of EU is accompanied with these big companies named Rayanair, Virgin Atlantic and Easy jet. These companies are highly invested by UK investors. There is seen high uncertainty over impact on ownership and control over the airlines companies business functioning (Franklin, Marsh and Wlezien, 2016).
Conclusion
In this report various data has been collected from several sources which divulges the true impact of referendum of UK on aviation industry. It is analyzed that aviation industry will face several negative outcomes of UK leaves EU. It is evaluated that If UK leaves EU then it will increase the tariff rate of import and exports of goods and services of UK. In addition, EU will be more negatively affected by this referendum of UK. Now in the end it would be concluded that there are several pros and cons of this referendum which would provide several impacts on EU and UK separately.
References
Bouoiyour, J. and Selmi, R., 2016. a. Are UK industries resilient in dealing with uncertainty? The case of Brexit. Working paper, CATT, University of Pau.
Franklin, M., Marsh, M. and Wlezien, C., 2016. Attitudes toward Europe and referendum votes: A response to Siune and Svensson. Electoral Studies, 13(2), pp.117-121.
Howard, P.N. and Kollanyi, B., 2016. Bots,# StrongerIn, and# Brexit: computational propaganda during the UK-EU Referendum. Browser Download This Paper.
Howorth, J., 2016. EU Global Strategy in a changing world: Brussels’ approach to the emerging powers. Contemporary Security Policy, 37(3), pp.389-401.
Tielmann, A. and Schiereck, D., 2016. Arising borders and the value of logistic companies: Evidence from the Brexit referendum in Great Britain. Finance Research Letters.
