Brexit uncertainty among travel businesses

European travel businesses slump on EU vote result
Airline and tourism companies are trying to put a brave face on the UK’s vote to leave the EU last Thursday. Stocks plunged on Friday, and IAG says it will no longer meet its profit targets this year, due to worries over travel demand and flying rights.
Airlines with a strong focus on the UK market are worst hit, with IAG, easyJet, Ryanair and Wizz Air all down by as much as 20%. Lufthansa, however, describes the impact of Brexit as “manageable”, as Britain accounts for just 5% of group revenue.
European tour operator TUI, about a third of whose turnover comes from in Britain, expects a dent in its profits due to the fall in the pound but does not foresee a big change in travel habits.
An exit could also lead to changes in airlines’ flying rights. The UK is part of the EU’s single aviation market, and there is no ‎certainty this will continue in the future. If it does not, the bank HSBC has said that 30% to 40% of easyJet’s operations could be affected, 30% of Ryanair’s operations and 25% of Wizz Air’s.
IAG said about the impact of Brexit: “Following the outcome of the referendum, and given current market volatility, while IAG continues to expect a significant increase in operating profit this year it no longer expects to generate an absolute operating profit increase similar to 2015.”
Reuters

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