Airlines’ Brexit Concern Eases as Pound Drop Pushes U.K. VisitsBy , , and
EasyJet CEO says U.K.’s EU-exit vote impact only ‘short term’
Brexit ‘just one of many’ global issues, Emirates’ Clark says
More than two months after the U.K.’s vote to exit the European Union sent airlines running for cover, carriers such as British Airways, Emirates and EasyJet Plc have concluded the fallout on traffic will be manageable.
While last-minute summer bookings plunged and fares extended their drop in the immediate aftermath of the June 23 referendum, corporate travel demand is expected to come back and Britain is in a position to woo even more visitors than before because of the weak pound, executives said at an industry conference in London.
"Brexit is just one of many things that happened in the global economy,” Tim Clark, president of Dubai-based Emirates, said in a Bloomberg Television interview. “We have more important things to worry about than that.”
Carriers in Europe were already struggling before the vote with weak economic growth and the effects of terrorist attacks in cities including Paris, Brussels and Istanbul that have discouraged leisure and business travel. EasyJet, the region’s second-biggest discount airline, offered its first-ever summer fare promotions this year, while larger low-fare rival Ryanair Holdings Plc and German mainline carrier Deutsche Lufthansa AG either cut 2016 profit forecasts or said targets were at risk.
“There was definitely a short-term trading effect” on sales immediately after the Brexit vote, but “from a longer-term point of view, nothing has changed,” EasyJet Chief Executive Officer Chief Executive Officer Carolyn McCall said at the conference.
“It was a seismic political decision for this country to take, and no one can underestimate that,” the CEO said. “But actually everything we’re doing today is the same.”
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EasyJet shares rose 2.9 percent to 1,187 pence as of 2:36 p.m. in London, paring the stock’s decline since the Brexit vote to 25 percent. British Airways owner IAG SA increased 3 percent and Dublin-based Ryanair gained 2.4 percent.
The pound’s drop on foreign exchange markets following the Brexit referendum has bolstered travel to the U.K. by making visits cheaper, offsetting less demand from Britons because of rising trip costs, said Norwegian Air Shuttle ASA CEO Bjoern Kjos.
The currency’s decline “hit us in one way, but that ramps up the volume as well,” Kjos said in a Bloomberg Television interview. “We see more and more people like to fly into the U.K.”