Brexit Fallout: The European Bargain Flight is in Danger

Brexit Fallout: The European Bargain Flight is in Danger
July 1, 2016 Market Traders Institute

 

All this week we are going to be looking at a different aspect of Brexit’s fallout. The obvious impacts are on the world’s currencies and stock markets.  But what else is affected that is a bit more under-the-radar?

 

A not-so-dirty secret of European travel has always been the bargain-priced airline tickets offered by Ryanair and EasyJet.  A European resident or visitor can travel within Europe for pennies on the dollar.  Travelling from France to Italy? 20 Euro ticket. Going from Germany to Budapest? That’s only 35 Euro.

 

This has all been possible because of the European Union’s Open Skies policy, which allows these flights to happen for such a low cost.  But with the UK leaving the EU, what does that mean for the future of discounted European flights?

 

If Carolyn McCall, CEO of EasyJet, has anything to say about it, nothing will change at all. “We have written today to the U.K. government and the European Commission to ask them to prioritize the U.K. remaining part of the single EU aviation market,” she said last week.

 

The other bargain airline, Ryanair, is based in Ireland and it’s status in Europe won’t be affected.  However, it will need to renegotiate its routes to the rest of the U.K.

 

Be prepared for this to turn ugly.

 

Major European airlines like Lufthansa and Air France have already had a terse relationship with the bargain flights; the larger airlines regarding them as a nuisance that takes away from their business and drives their costs down to stay competitive. The bargain flights will obviously want to keep the Open Skies policy valid, but the larger airlines now have an opportunity to fight them along the way.

 

That’s not even taking into consideration that the EU might not want to keep the Open Skies policy valid anymore. Starting negotiations now opens up the opportunity for higher restrictions on travel.  And higher restrictions means higher costs.

 

Time will tell if the era of the bargain flight will close. If it does, Europe might realize just how spoiled on cheap travel they actually were.

 

The Brexit fallout is happening across the world, and you can be part of the action by attending a FREE webinar. Don’t miss out on the chance to potentially capture thousands of pips within the next 60 days!  Click here now to register.

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