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Brexit and the Business Travel Industry

Brexit and the Business Travel Industry

Time flies. It has now been over two years since the United Kingdom voted to leave the European Union.

With the 29th March 2019 exit date looming, time is running out for a deal to be reached as not only will the agreement need to be passed through the parliaments of the remaining 27 EU Countries, it will also have to be voted through UK parliament – something of challenge for a prime minister with a small majority and a party who have contrasting views as to which direction the country should go in.

Whilst some of the projected disasters we were warned of during the referendum campaign haven’t come true (a new recession, rises in unemployment), the country has had to live with a huge amount of uncertainty since we voted to leave, and this uncertainty for all industries continues as we head into the final stages of negotiations.

Despite the Government agreeing a negotiating position for the final stage of the talks back in July, as the October (or at worse November) deadline to reach a deal edges closer, and a ‘no deal’ scenario becoming more of a reality, they are now releasing in-depth white papers on the practical implications should talks fail and we leave the EU on World Trade Organisation terms.

Experts predict that along with automation, the aviation industry will be one of the hardest hit should the negotiations not be successful, which in turn will mean ramifications for those who regularly travel for business. Even if a deal is reached, changes are ahead, and we have no choice but to start preparing ourselves for a life outside of the EU.

As a society we have become used to travelling freely around Europe; currently, we don’t need visas or working permits, our driving licences are valid, and we have fast track queues at immigration. Some, or possibly all these things will change in some way after our departure, regardless of what deal is reached.

The most recent white paper suggests a no deal Brexit would mean UK Nationals could be required to have 6 months left on their passport to travel to Europe, and those wishing to drive on EU soil would require an International Driving Permit (IDP) which would be available in Post Offices, but for a cost of £5.50 (and possibly a different permit needed  for each EU country visited). This means there will be not only an increased cost but also increased administration associated with sending employees to conduct business in Europe.

As well as the effect Brexit will have on those travelling to Europe from the UK, there are also implications for airlines based in the UK. Under the current ‘EU Open Skies’ agreement, companies can fly freely between the UK and EU as well as between mainland European countries. This will be a key sticking point during the negotiations, as one of the UK’s red lines is to completely leave the jurisdiction of the European Court of Justice (ECJ), and the ECJ oversees the Open Skies agreement. This is a major worry for airlines, with RyanAir warning in August “There remains a distinct possibility that there may be no flights, for an unknown period of time, between the UK and the EU from the end of March 2019” should we leave without an agreement.

Airlines who are based in the UK, such as Easy Jet, are expected to be hit the hardest by this issue. EasyJet currently has a UK and Swiss Air Operator Certificate (AOC), but with Switzerland not being a member of the EU, they are having to obtain a new certificate in Austria, meaning 40% of their aircraft will carry the Austrian emblem. Thankfully this new EU certificate will safeguard Easyjet’s network should a deal not be reached, but it’s a stark reminder of the cost and time required for companies to successfully navigate the rocky road ahead.

It’s not all doom and gloom, and there have been some positive outcomes since the vote; official figures reveal the weaker pound helped attract a record number of overseas visitors to Britain in 2017, including an increase in the number of Europeans visiting, and despite the uncertainty and higher exchange rate, the Office for National Statistics believe more UK Nationals than ever before went abroad on holidays or business trips.

Another relief for business travellers and holidaymakers alike will be the recent revelation from several UK phone companies that they have no plans to reintroduce roaming charges in Europe, even if there aren’t any laws preventing them from doing so.

With so many variables to consider, it’s impossible to know what the next few months and following year will entail. With political viewpoints and public opinion evolving at a rapid rate, anything is possible… The only thing we know for sure right now is that ‘nothing is agreed until everything is agreed’.

The uncertainty of Brexit is a great reminder of why it is ever more important to have a secure Travel Management Company in place to help navigate through these challenging changes. (Sourcing a TMC for the first time? we have a handy guide HERE)

What are your thoughts on Brexit and the business travel industry? Let us know in the comments below...

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About James Plumb

James is one of our experienced Business Development Managers and loves nothing more than helping his clients obtain the latest solutions to help make business travel easier.
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