Brace for Brexit: UK air traffic faces slump without deal, airports warn

Growing uncertainty about an 'open skies' deal
between the UK and European Union countries ahead
of Brexit risks triggering a catastrophic slump in
British air travel, according to the country's biggest
airports.
Sky News has obtained a confidential report
submitted to Government by Gatwick, Heathrow,
London City, Manchester and Stansted airports, which
urges the EU and the UK Government to target
October next year as the deadline for an interim
aviation arrangement.
The report, written by consultancy WPI Economics, is
understood to have been sent to ministers in recent
weeks.
Heathrow is among the airports behind the report
Its emergence highlights the importance attached to
an early aviation agreement between the UK and EU -
an industry priority given added urgency by the fact
that the sector is not subject to a World Trade
Organisation (WTO) framework and therefore faces
seeing flights grounded without a new temporary or
permanent deal.
The document's most pessimistic scenario forecasts
that between March 2018 and March 2019, there
could be a 41% fall in passenger demand across
Britain's biggest airports - equating to 8.1m bookings,
or 16.2m journeys, between the UK and EU countries
It also highlights the risk of a 20.6% decline in
aircraft movements - or 297,000 flights - and a 3.8%,
or 8,600-ton, fall in freight traffic.
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Gatwick is also among the airports warning of
Brexit uncertainty
While WPI does not attempt to quantify the potential
revenue impact of such falls, a source at one of the
operators said it was likely to be hundreds of millions
of pounds across the five airports.
That would translate into much bigger sums in the
regional economies surrounding the airports.
The report, titled 'Brexit and the aviation industry: the
opportunity for certainty', is thought to be the first
time that the owners of Britain's four largest airports,
as well as the smaller London City, have joined
forces to warn of the risks of uncertainty about post-
Brexit arrangements.
"With airlines, passengers and airports having to plan
months if not years in advance, this has potentially
detrimental consequences for UK competitiveness,
trade, growth and living standards, which all become
more significant the longer that UK and EU
negotiators fail to deliver a new trading relationship
or transitional deal," the WPI report says.
"This is an important point.
"Although an 11th-hour deal may prevent planes from
being grounded, damage to the aviation industry and
the wider economy would have already been done."
Ryanair boss Michael O'Leary has previously
warned on the impact of no aviation deal
WPI stresses that an early agreement with the EU is
necessary because the closer the industry gets to
the end of the Article 50 withdrawal process without
a deal, "the greater the negative economic
consequences will be".
"Any slowdown in aviation traffic will undoubtedly
have detrimental consequences for UK
competitiveness, trade, employment, growth and
living standards and airport infrastructure and foreign
direct investment," said one airport industry source
who has seen the report.
Heathrow's involvement in jointly sponsoring the
document is intriguing because of its consistent
argument that it needs to build a third runway
because of soaring demand for flights from the UK's
only hub airport.
The airports' collective alarm bell follows a string of
similar warnings by airlines in the 14 months since
the EU referendum.
Last month, Michael O'Leary, the Ryanair chief
executive, met Chris Grayling, the Transport
Secretary, to reinforce an earlier statement that
airlines would be "cancelling people's holidays" in
the summer of 2019 without a new UK-EU aviation
deal.
Transport Secretary Chris Grayling is said to
have had positive talks with EU counterparts
A source close to Mr Grayling said preliminary
informal talks with his EU counterparts had been
"positive".
Mr Grayling has also met with US officials and
airlines to discuss the potential renegotiation of
aviation deals with 'third countries' that will be
affected by Brexit.
A Government spokesman said: "Aviation is
absolutely crucial to the UK's economy and we are
committed to getting the right deal for Britain.
"Our aviation industry is the largest in Europe, and
both we and the EU benefit from the connectivity it
provides.
"That's why we are pursuing liberal access to
European aviation markets - including all the benefits
that brings for consumers."

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