EasyJet is not alone in having concerns about currency volatility and political uncertainty.

26-12-2012Irene G.Ruiz

The Economía Creativa Consultancy, based in Malaga, has produced a report into the impact of Brexit on the Spanish tourism industry. A headline finding is that UK tourist spending in Spain could fall by up to twelve per cent. This would primarily be the result of the fall in the value of the pound, as witnessed with the reduction in the immediate aftermath of the referendum result.

The report suggests that a protracted period of uncertainty related to negotiations for the exit may well affect UK consumers' travel decisions, as also could weaker UK economic performance.

These findings aren't particularly earth-shattering. Similar conclusions have been drawn elsewhere, but the report does offer some more positive news in believing that Spain will benefit over certain other European destinations because it is comparatively cheap. The report cites France and Italy as being more expensive. There could also be an advantage over Greece (or Turkey if it were to recover) because of proximity: flights would be cheaper.

Economía Creativa makes the point that the cost of fuel will rise because of the fall in value of the pound against the dollar, adding that the UK would be outside the common European aviation area, something that will have an impact on airlines such as Ryanair and easyJet, both of which are looking at shifting operations away from the UK as a means of avoiding having to increase prices. As their business models are "low cost", competitiveness will be affected by Brexit.

EasyJet, meanwhile, is warning that it can't make firm predictions as to how this year will go. It has suffered a fall in share value, as have most other airlines, because of security issues, political and economic uncertainties and - specifically with regard to the UK - a drop in consumer confidence and anticipated ongoing currency volatility.

Comments

To be able to write a comment, you have to be registered and be logged in.

* Mandatory fields

Currently there are no comments.