The sector faces ‘years of uncertainty’ as Britain exits the EU, industry leaders heard last week. Ian Taylor reports from a Travlaw event
The Supreme Court halted the government’s attempt to trigger the Brexit process without a vote in Parliament last week, but the decision brought no new certainty for the travel sector.
Travlaw senior partner Stephen Mason said: “The Court of Appeal decided the prime minister couldn’t take away people’s employment rights, rights to travel, rights of citizenship, rights to vote in European elections, and the Supreme Court said the Court of Appeal was right. Parliament has to do it.”
He told a Travlaw Big Tent Event in London: “It also decided the other governments – Scotland, Northern Ireland, Wales – can’t stop Brexit.” But the certainty ends there.
Travlaw partner Farina Azam said: “No one knows what’s going to happen. If we’re not part of the single market, it will have a huge effect. If there is not free movement, people are going to have to look at visas, at overseas employees, at customs charges.
“Theresa May has said any laws in place at the date of Brexit will automatically go into UK law. But anything they want to amend they will do so. We have years and years of uncertainty ahead.”
CAA head of Atol Andy Cohen agreed, saying: “Until a deal is struck the uncertainties are a major concern. We’ll be looking closely at people’s hedging policies and how they buy forward currencies in order to minimise the [impact of] fluctuations in currency.”
White Hart Associates head of travel Chris Photi said: “Currency is an issue. Businesses would have been hedged [on currency] in 2016. They’re not going to be hedged in 2017.”
Cohen added: “The UK aviation industry punches way above its weight in the global market [and] liberalisation has done a lot. It has enabled free movement, given protection for denied boarding, protection for disabilities. These are principles we wouldn’t wish to see blocked.”
Abta chief executive Mark Tanzer warned: “A lot of arrangements are reciprocal. We can say [what] we want, but we need the other side [the EU] to agree.”
Photi suggested UK-based companies “should think about setting up an EU establishment”, warning: “The tap to your European market may be turned off if you haven’t got an establishment somewhere [in the EU].”
But Michael Ellis, group general counsel at Abercrombie & Kent, said: “Setting up an entity is not easy. It’s expensive and risky.”
Azam agreed: “It’s not as easy as just upping sticks and starting in another country. There is so much to think about as well as regulation – insurance, tax, your employees, everything comes into play.”
However, Debbie Marshall, managing director of Silver Travel Advisor, insisted the uncertainty need not hamper the sector, saying: “We see an absolute unwavering desire to keep travelling. A lot of older people voted for Brexit. They’re relaxed about. They knew the UK before it went into the EU.”
Transport secretary Chris Grayling told the Airlines UK annual dinner last week: “We believe it’s in the EU’s interests to seek a liberal arrangement for aviation. I’m confident we’ll get what we need.”
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