In another three months we’ll know whether the United Kingdom will have struck a final deal with the EU or whether they’ll force a so called “hard Brexit.“
The latter, despite soothing words from some of the UK’s government ministers, will surely bring much uncertainty and in the worst case chaos for a large portion of the transport industry.
Branson - the pound will plummet!
Sir Richard Branson, one of the UK’s most successful business entrepreneurs, is convinced that the UK is heading for disaster with hard Brexit scenario.
He emphatically warned in a recent interview with the BBC that a hard Brexit would be “devastating“ for Virgin and would mean that the group will be forced to shift investment out of the UK.
Richard Branson who founded Virgin Atlantic Airlines and in the meantime whose group’s portfolio includes media companies as well as financial services, main worry at the moment is that the British currency will slump overnight to an all-time low if a hard Brexit becomes fact. He warned already last December that it’s his firm conviction that the UK will be almost bankrupted if they crash out of Europe.
Virgin Atlantic will be hard hit
Branson has always been one who never minces his words and has himself taken quite a few brave decisions during his career.
He’s worried about the future for Virgin Atlantic which in the BBC interview he says has already lost large amounts of revenue since the referendum took place in 2016. At that time, he stated, the UK pound was listed at US$1,53 and today it has slumped to US$1,22. He goes even further by saying that the fund would collapse to a one-for-one parity with the dollar.
This would in his view mean that because Virgin Atlantic’s costs are mostly in dollars, that the carrier would suffer a further sterling loss amounting to UKP100 million per annum and that air cargo shipments to the USA would more or less fall apart. It’s not just the airline he’s worried about, but many of the other Virgin business interests.
Hard words from a wide-awake businessman who is definitely not known as being a scare monger and undoubtedly has British interests at heart.
Branson is also involved in a hefty dispute with the British Department for Transport who because of a fight as to who should carry the risk for pensions, have disqualified Virgin Trains and their partner Stagecoach from bidding for the new West Coast Mainline franchise which Virgin has been operating for more than twenty years.
Hoping the problem will go away!
That’s what some industrial bosses hope will be the case. However, with the introduction of a new government in the UK, possibly run by hard liner Boris Johnson, the hard Brexit scenario looks to be the one which will dominate.
There has been much discussion of how that scenario will actually affect the transport of goods between the UK and Europe after Brexit kicks in on October 31st. Much will depend on how and whether UK officials and their European counterparts will pull together in order to avoid a chaotic scenario at British and European ports.
Those are probably just the short term effects. Long term implications are many, but few have been tackled in a sense that at least the rest of the EU and the UK will get into gear to make sure that there will be “business as usual“ in the future.
All still very shaky and living on the hope that the problem will solve itself.
Which, it won’t!
Maybe far better after all to listen to Richard Branson’s warning.
John Mc Donagh