BREXIT – Views from the Aviation Industry

In our lead article in today’s CargoForwarder Global we reflect somewhat on what may be the short or long-term consequences for the European logistics community if Great Britain is going to vote for an exit from the EU in the referendum being held this Thursday.
There’s no answer deliverable by anyone so far as to what the future may bring.
We have gathered a few opinions and views from the aviation handling sector which we feel make interesting reading as they also differ considerably.

John Willis
John was Chairman & CEO of UK-based ground handler Servisair until his retirement and also Chairman of IAHA, the International Aviation Handlers Association as well as Board member of the IATA Ground Handling Council (IGHC). He comments as follows:

There is in the UK an overwhelming view that the EU is at best undemocratic and is more about regulation and red tape whilst at worst it has a different vision than that originally, at least publicly, envisaged by the UK public.
Where opposing sides differ is that the “Remain” supporters feel that the UK is better in the EU trying to influence it from within, whereas the “Leave” view feels the UK would be better to develop independently and evolve separately.
The UK is the second largest net contributor to the EU Budget and represents 12.5% of the EU population. The remain supporters are focusing their case on the economic problems “if the UK leaves rather than the advantages of staying.”
The EU and therefore the UK, does not have a Trade Agreement with the U.S. - the UK’s largest single country market, nor indeed with China or India.
The EU is responsible for all aviation bilateral negotiations for EU countries with non-EU states and if the UK were to leave, it would have to resume these itself. However, if anything, the UK may be stronger here than at present given the importance of London in traffic and yield terms to most long-haul airlines.
It is difficult to envisage any change to the Ground Handling scene in the UK given that all UK airports have adopted an ‘open market’ and no longer require to tender under EU rules. A few airports such as Heathrow require a certain level of volume in a particular Terminal to be approved, but these are local arrangements, and there is no restriction on non-EU companies operating in the EU.
Whatever happens, the UK will still be part of geographical Europe but whilst there is widespread support for trade relationships, there is absolutely no general support in the UK for either greater fiscal or political ties. One thing is certain however - turnout (for the referendum) will be high and therefore the result will reflect the view of the majority which has got to be a good thing.

Ben Radstaak
Managing Director at Air Cargo Netherlands
For Air Cargo Netherlands and for most companies active in the European air cargo industry, a Brexit would not be beneficial. Though most air cargo flies intercontinental, many European airlines fill their cargo holds with freight which is trucked to many European destinations. An external border between the UK and the rest of Europe would make this less economic, in particular for European carriers. The bigger economic picture shows that Europe as a whole will be less competitive when the UK leaves. Just the uncertainties caused by the negotiations in the years to come, will seriously affect economic growth on both sides of the Channel and the North Sea.
Therefore we kindly request all of you in Britain: please don’t leave us!
In addition, the consequences of the UK leaving the EU would mean the loss of a most valued ally when it comes to the modernization of Europe’s customs procedures and related regulations. The recent discussions about the changes in the transaction value of import goods caused by the delays in the decision making around the UCC (Union Customs Code), speak for themselves as a nasty example that more common sense is needed in Brussels. Over the years, the Dutch and British governments and industry representatives have consistently pushed for more effective and efficient ways of facilitating logistics processes at our external borders.

The disappearance of a strong and forward thinking member-state could shift Europe’s power balance in a Mediterranean direction, which all of us like when we’re on holidays, but which is less desirable for our economies.
So again, please don’t exit the EU, but stay to make it stronger!

 

Yvonne Ziegler
Professor Business Administration / Aviation at the Frankfurt University of Applied Sciences (translated from German),
I believe that what the Ifo-Institute termed in its 2015 report as a “soft exit“ may be the way for Britain to leave.
Great Britain would then get the same status as enjoyed by Switzerland and Norway, namely a preferential economic partnership and customs agreement.
However, mid-term, trade will be hampered as there will be deviations on rules and product standards. This will ensure much higher costs for both British and European companies. The effect on air freight will be less as these are generally goods of a much higher value and which can  better bear the extra cost.

Jonas van Stekelenburg
Head of Cargo Amsterdam Airport
Thinking about the Brexit - a few things come to mind.
We favour an open economy and the removal of as many barriers as possible. Therefore, we hope that the UK stays within the EU.
The way a Brexit is structured matters: the question is if there will be a favourable regime towards free movements of goods or rather not.
If so, as AMS we suffer since we distribute goods towards and from the UK.
Should this not happen, we benefit since Heathrow and Stansted are competitors and the Dutch economy is in a way a competitor of the UK economy. This would bring more business to Schiphol.

Ariaen Zimmerman
Executive Director Cargo IQ / IATA Geneva

We need more interoperability, not less.
A Brexit is a clear move in the wrong direction.
Realising that politicians have their own interests, the common interest is the one losing out. The agency issue is typical in economics. How do you make sure management serves their shareholders,  markets, society and the organization when they have their own interests?
In this sense, the Brexit isn’t different from the financial crisis. Management and politicians have short-term personal goals that don’t necessarily align with the long-time common interests.

Views gathered by: John Mc Donagh / Heiner Siegmund

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