The people of the United Kingdom have voted for higher airfares with their decision to leave the EU?
The vote to leave the EU will almost certainly mean the rock bottom fare bonanza enjoyed by tens of millions will be over for flights to Europe.
easyJet founder Sir Stelios Haji-Ioannou told the UK’s Daily Mail Tuesday that it’s very possible the routes between the UK and Europe will become more expensive.
"It is certainly not my place to tell people how to vote, but it is very possible that — in a post-Brexit Europe — a more restrictive aviation environment would mean fewer flights from the UK to Europe and hence less competition between airlines,” Haji-Ioannou told the Daily Mail.
“That in turn would mean higher air fares so that the price of a family holiday to the (Mediterranean) will go back up again to levels last seen in the 1980s.”
And easyjet is looking to move a separate business unit to Europe if the UK votes out.
At the same time the CEO and founder of Ryanair has been more vocal urging UK voters to stay in the EU.
In May Ryanair CEO Michael O’Leary told media that being in the EU has enabled cheaper flights for Britons.
While Ryanair is based in Ireland, much of its business is from UK airports to Europe.
Without a doubt the biggest benefit for airlines and passengers from EU membership is in the area of traffic rights.
Any airline owned and controlled by nationals of EU member states is free to operate anywhere within the EU without restrictions on capacity, frequency or pricing. This gives customers a competitivey priced choice of destinations and impressive flight frequency to match.
An EU exit means customers using smaller airports like Cardiff, Aberdeen, Newscastle and Liverpool could be served by less flights from EU countries and cop a resultant airfare increase as the competition falls away.
According to CAPA, the creation of the liberalised internal aviation market was one of the most important catalysts behind the rapid development of LCCs in Europe in the 1990s. Today, the extensive pan-European networks of Ryanair, easyJet, Vueling, Norwegian and others are built upon this free access.
Of course, Norway is not part of the European Union, but Norwegian has equal access to the internal European market for air transport, thanks to the European Common Aviation Area (ECAA).
Monarch Airines says that free trade agreements within the EU are what made low fares possible and argues that an EU exit would be “extremely damaging to UK aviation and the UK travel industry.”
The exact effect on fares and traffic would depend on the air service agreements that results but according to experts one thing that is for sure is that fares will rise. In addition to this, the Pound may also be worse off against the Euro so overall the cost of a holiday would increase significantly.
To try and minimise impacts on aviation if the UK were to exit, one option could be that the UK retains its access to the free aviation market by negotiating participation in the European Common Aviation Area (ECAA), an agreement which allows Norway, Iceland, Croatia and other states equal access.
According to CAPA, the Agreement provides for expansion of the ECAA to include other countries that are happy with two broad conditions. Firstly, they must be prepared to accept EU aviation laws and, secondly, they must establish a "framework of close economic cooperation, such as an Association Agreement" with the EU.
It may seem reasonable to assume that the UK would be prepared to continue to accept EU aviation laws, since it does currently. A similar logic would also suggest that the UK would establish continued close economic cooperation with the EU as Norway has done.
