TOURISM MATTERS: Possible referendum fallout for airlines
AS WE RAPIDLY APPROACH June 23, when Britons vote in a referendum on whether to stay within the European Union (EU), I really wonder if our tourism sector has thought through the potential implications for Barbados?
Almost all the industry pundits agree that if Britons leave it will impact negatively in several ways. Increased airfares, less financial protection on package holidays, the loss of delay and cancellation compensation under an existing structured arrangement and the huge unknown of the effect it may have on the value of sterling.
Any or all of the above will certainly affect us. We are already perceived as a high-cost destination so will it drive potential visitors to areas where they think they can obtain better value for money?
Under rule EU261, currently agreed levels of compensation for delays and cancellations are written into law for all airlines registered and operating out of the EU. If Britain withdraws from the EU what happens to airlines like British Airways, Virgin Atlantic Airways or its new Caribbean subsidiary, Thomas Cook and Thomson? Will they be then obligated to offer similar levels of recompense?
How would it effect the current open skies arrangements? Almost certainly new air services agreements would have to be negotiated, competition could be reduced and fares may rise again.
Sterling when compared with the United States dollar has already been under severe pressure recently, any further effective devaluation will put further pressure on the tour operators to re-negotiate lower contract hotel rates and perhaps tempt normally returning individual visitors to other destinations which are not so pricey.
Investment bankers, Goldman Sachs has predicted “that sterling slide could dip to as low as $1.15 against the dollar”. If this prediction is even remotely feasible, can you imagine the consequences it would have on our critical tourism industry?
In the event of a Brexit it is likely that EU-originating regulations that benefit and protect travelling consumers would need to be replaced with parallel United Kingdom-originating regulations to ensure that consumer confidence is maintained.
One compensating component may be that further additional pressure will be brought across the whole industry to eliminate or at least dramatically reduce the world’s highest departure taxes, the advanced passenger duty.
Changing the subject, a lesson learnt is my ongoing battle with one of Britain’s low cost carriers, EasyJet. A recent survey by AirHelp stated that of all the world’s airlines EasyJet has the second worst record of settling compensation claims.
With three members of my family on one flight, EZY2019, the airline is now blaming the weather and citing ‘extraordinary’ conditions. Never mind that on the day in question Storm Katie had no significant detrimental effect on Luton Airport. Tenacity is in my blood and I am not ashamed of that.