Airlines fly lower amid EU Brexit warning and electronics ban
Airline shares tumbled on Wednesday after news of potential route restrictions post-Brexit combined with a US and UK ban introduced new restrictions on electronic devices for certain flights.
easyJet
493.00p
16:44 04/10/24
FTSE 100
8,280.63
16:49 04/10/24
FTSE 250
20,900.08
17:14 04/10/24
FTSE 350
4,570.17
17:14 04/10/24
FTSE All-Share
4,527.24
16:54 04/10/24
IBEX 35
11,659.20
18:44 04/10/24
International Consolidated Airlines Group
€2.30
18:15 04/10/24
Ryanair Holdings (CDI)
€14.41
17:14 17/12/21
Thomas Cook Group
3.45p
16:45 20/09/19
Travel & Leisure
7,830.25
17:14 04/10/24
TUI Travel
437.60p
16:59 11/12/14
UK airlines have been warned by European Union officials that they could lose the right to fly certain European routes after Brexit unless they move their headquarters onto the continent, according to reports.
Airline bosses from EasyJet, British Airways owner IAG, Ryanair and Thomson owner Tui Travel were also told that they must ensure a majority of their shares are EU-owned, the Guardian newspaper reported on Wednesday, following similar reports from the Financial Times in January that specifically noted that some Ryanair and easyJet shareholders could be forced to sell their stakes to EU nationals as otherwise they would breach their European licences and flying rights.
The UK faces potential "substantial" increases in air fares and reductions in air connectivity as Britain's divorce from the EU takes place, Professor John Lennon of the Glasgow School for Business and Society told Digital Look.
"Airline have so much access privileges that really help them build economies of scale. What's being talked about could create a real headache - and it's not over year," he said.
"We will have to renegotiate air access with all the countries of the EU - and there are many European laws that benefit tourism, such as protection for people going on holiday. If we don't negotiate a substantial replacement deal it would be catastrophic for the tourism industry."
Brexit minister David Davis told a parliamentary hearing last week that the UK would need to leave the 'open skies' agreement as part of Brexit, but said he "would presume" there would be a successor.
Lennon said 2016 results for travel and tourism companies had created a false dawn as UK tourism benefited from the post-Brexit slump in the pound making visiting the country much cheaper.
"I think 2017 is going to be a year of significant shocks for the travel and tourism economy," he said.
On Tuesday, the UK announced a cabin ban on large electronics like laptops and larger tablet computers for flights coming from six countries: Turkey, Lebanon, Jordan, Egypt, Tunisia and Saudi Arabia, affecting six UK carriers and eight overseas airlines.
On Monday, the US Department of Homeland Security banned large electronic devices in cabin baggage on flights from eight Muslim majority countries.
That measure affected nine airlines from 10 airports with no end date planned for the ban.