EU: UK commercial aviation strongly in favour of Remain Brexit vote

FARNBOROUGH — On 23 June, the United Kingdom will hold a referendum on whether to withdraw from the European Union. While a significant, and indeed shameful, amount of the support for withdrawal (the “Leave” campaign) is based on xenophobia, prejudice and racism, there is a section of the proponents that suggests that the UK would benefit economically. In discussions around the 2016 Farnborough Air Show’s media day, it seems that the UK’s commercial aviation sector is overwhelmingly in favour of remaining within the EU.

According to the officials in the Library of the House of Commons Economic Policy and Statistics Section [PDF], the UK “has a 17% global market share in aerospace industry revenues, making it the largest in Europe and second only to the US worldwide”. ADS, a trade group for the UK’s Aerospace, Defence and Space sector, says that its member companies “are clear that the UK’s continued membership of the EU is good for companies, their employees and the future prosperity of the country.” Approximately fifty percent of the UK’s aerospace sector, ADS says, is commercial.

Boeing and Airbus are the two dominant companies within the UK’s commercial sector. Boeing confirmed to Runway Girl Network that the company’s policy of neutrality remains in place. Industry insiders suggested to RGN that Boeing’s no-comment points to Airbus’ significant exposure to a Brexit, and the European airframer could not be more in favour of the UK remaining within Europe if it tried. Airbus has made numerous public statements, including from its UK head Paul Kahn, and as a letter to its UK staff signed by seven senior staff members including chief operating officer Tom Williams.

kontron newest“Airbus Group has come out strongly in favour of the UK staying in the EU,” the letter reads. “We firmly believe that it makes good economic sense to stay inside the EU which has helped make the company the global success story it is today.”

Airbus’ position: “Our business model is entirely based on our ability to move products, people and ideas around Europe without any restriction and we do not believe leaving will increase the competitiveness of our British based operations.”

Speaking by phone with RGN, Oxford Airport managing director James Dillon-Godfray said: “The consensus within the industry as a whole is that the Brexit scenario will reduce overall demand for commercial air transportation in and out of the United Kingdom. Costs almost certainly would rise as a consequence with the weakening of the pound — that is something that most pundits seem to agree on.”

“Aviation fuel sales are all based in US dollars per US gallon,” Dillon-Godfray highlighted “and if the pound against the dollar has weakened considerably, which most banks are predicting is likely to be the case, the cost of buying jet fuel in the United Kingdom will be much higher than it is today, compared with buying it on the Continent.”

Even though Crystal Cabin Award-winning seatmaker Rebel.aero is still new and not yet focussing on the matter, managing director Gareth Burks highlighted the uncertainty to RGN: “In my discussions with customers, banks, accountants, et cetera, no one can clearly say what the effects of leaving Europe will be — either positive or negative. But what everyone does know is what the current climate is whilst we are in Europe.”

The UK's commerical aviation sector is both significant to the economy and concerned about a potential Brexit. Image: John Walton

The UK’s commercial aviation sector is both significant to the economy and concerned about a potential Brexit. Image: John Walton

That concern is shared by AirAsia’s new seatmaker Mirus, where chief executive Phil Hall told RGN that the company is “concerned in that Mirus is a newly established, British company, operating globally with an increasing customer base inside and outside of the EU, and there is no real guarantee of how it will affect us.”

Hall explains that “issues arising from a Brexit that could negatively affect Mirus include: possible changes to UK laws, chance of being more difficult to operate in Europe, less credit being available for SME’s, immigration and work permits.”

Britain, as a much smaller market, becoming less attractive to foreign investors and maybe even some potential customers,” would also be an issue, Hall said, as would “maintaining price competitiveness with European seat manufacturers taking into account increase in customs tariffs and longer delivery times due to new border controls and paperwork. The ease of doing business with any potential new customers in Asia or elsewhere would likely rely on the strength of the re-negotiation of trade deals with those countries.”

Hall highlighted that uncertainties are already depressing the UK financial market and economy, which slipped into recession for the third time in eight years. Uncertainty over the UK’s economic future is likely a major factor there, and is greatly concerning the commercial aviation industry.

Aviation is a significant part of the UK economy. Image: John Walton

Aviation is a significant part of the UK economy. Image: John Walton

“Really, nobody has a clue what happens next post-Brexit,” Oxford Airport’s Dillon-Godfray explained. “If we stay in, it’s all predictable and everybody knows where the land lies. If we go out, it’s just a complete grey area as to what is likely to happen, in the first eighteen months, three years, or five years. Anyone who thinks they know is talking absolute rubbish, because nobody knows. That ambiguity is something that gives a lot of operators and a lot of people in the industry discomfort.”

In terms of likely scenarios, however, “I suspect that the economy will be impacted to such a degree that taxation in various forms will have to rise to compensate for what might be a diminished economy as a consequence of fewer exports, making the tax burden a bigger problem for the government,” Dillon-Godfray posited.

A problem, Dillon-Godfray continued, is that “some people are not thinking about it at all, which I think is a dangerous thing to do. I think it could affect our industry dramatically and people really need to get their heads around the what-ifs, because they could be quite significant.”

It is clear to the commercial aviation industry that remaining within the EU is crucial for the stability and certainty required for investment, and for the free movement of goods and services that are a key benefit of EU membership. Brexit would be a body-blow to this successful economic sector.

Read More:

Main image: British Airways

11 Comments

  1. Nicholas

    ‘While a significant, and indeed shameful, amount of the support for withdrawal (the “Leave” campaign) is based on xenophobia, prejudice and racism, ‘.

    Am I reading the Daily Mail here? This is a rather inflamed comment, no?

    This is a very one sided article. I have met countless people within the industry very pro-Brexit.

    • John Walton

      And if you have met countless people within the industry who are very pro-Brexit, would you care to name any?

  2. John Walton

    What precisely is inflamed? Are you objecting to my classification of xenophobia, prejudice and racism as shameful? If so, I’m afraid you will find little support in these pages.

    If you’re objecting to my classification of a significant amount of support for Leave being based on those three things, after careful consideration of the arguments being made by key proponents of Brexit, I disagree. Between Boris Johnson’s racist suggestion that US President Obama has “ancestral dislike” for the UK because his father is Kenyan, and just this week the Leave dot EU video presenting words from Donald Trump over dogwhistle-plus images and music, it would be disingenuous to suggest that these factors are not substantial, and irresponsible for me as a journalist (writing, I must highlight, for a largely non-UK audience) not to point that out.

    With none of the companies I contacted via phone or email, nor any I spoke with yesterday in person, identifying as pro-Brexit, I invite you to Google terms like “aviation brexit” — and even “aviation pro brexit”. Even an IEA finalist paper for its 2014 Brexit prize stated as early as two years ago, notably after significant attempts at balance, that “Nevertheless, it is possible that the air transport industry might have to bear significant costs as a result of a British withdrawal. It is difficult to quantify these at this stage.

    I do of course welcome commentary on or off the record from UK aviation companies in favour of Brexit — my email is in my RGN profile on this page.

  3. Nic

    We both know that I was suggesting your comment on ‘xenophobia, prejudice and racism’ being the reason for a ‘significant amount of support for withdrawal’ was what I was questioning. Your interpretation of Boris Johnson’s speech does not justify this. I know many Brexiters and Non-Brexiters, not one would classify their arguments are xenophobic, prejudiced and racist, and if they did, I wouldn’t be having many more conversation about it with them.

    I value what you’re saying, I truly do, and I thank you for getting back to me so quickly, if not slightly defensively. I was simply picking up on the point that this seemed a little brash and one sided for my taste.

  4. John Walton

    Alas that, not least noting the context of a piece written today by an influential industry commentator suggesting that racism does not exist on US aircraft, it is no longer possible as you suggest to automatically assume.

    It is not, of course, just my interpretation of Boris Johnson’s words. It is the interpretation of publications ranging from The New York Times to The Spectator to the New Statesman — and, of course, to the Africans For Britain campaign, which left the Johnson/Farage-backed Vote Leave as a result, calling the comments “alarming”.

    I do note that the only engagement you (and indeed commenters elsewhere) have offered with this piece is with the second sentence, on whether there is significant xenophobia, prejudice or racism among Leave groups, of a nearly 1000-word piece that largely discusses the economic impacts of a potential Brexit. I think we have largely exhausted the former, and welcome further substantive comment on the latter.

    And, of course, my offer for you to name any of these countless pro-Brexiteers within the aviation industry, or for them to identify themselves (publicly here or via email) remains open. I am very keen to understand how and why they have reached their positions.

  5. Nic

    Thank you for your response.

    All I will add, is… to your ‘largely non-UK audience’, I can’t claim as to whether anyone or everyone who supports Brexit is ‘xenophobic, prejudiced and racist’, as I would hate to assume or state that without asking everyone first (I’m not a journalist after all). I would however like to point out that chap that is being discussed here (one of the heads of the Brexit campaign, Boris Johnson), is the very recently departed, twice majority elected, Mayor of one of the most ethnically, culturally and religiously diverse cities on earth, London.

    *Drops the mic*

    • Mary Kirby

      Hi Nic,

      Thanks for your feedback. I find it interesting that you see John’s comment as totally sweeping. He did not say “all” individuals in the Leave camp are xenophobic. He merely observed that “a significant, and indeed shameful, amount of the support for withdrawal” do fall into that category. There is plenty of evidence to support his statement (one does not need to look much further than the toxic comments on social media). Some are so nasty, I do not want to repeat them.

      We’re seeing rising xenophobia on both sides of the pond. Looking inwardly and asking ourselves the tough questions about the reasons “why” is crucial, as we humans evolve.

      Warm regards,

      Mary

      • Nic

        Hi Mary,

        Thanks for your response.

        I guess we can agree to disagree on this. I LOVE the articles that Coke out of RunwayGirl, however a heavily politically charged, one sided article is one that I will shelve this time.

        Please keep up the good work and I look forward to hearing more from the world of RunwayGirl.

        Cheers, Nic

  6. John Walton

    I purposefully couched my language to avoid the #NotAllBrexiteers strawman to which you seem determined to respond. The entire article revolves around the fact that UK aviation is pro-EU, but do feel free to continue to respond to the contextualising 2 percent.

    Do, again, feel free to name any pro-Brexit aviation companies for readers to compare against the growing list of pro-EU aviation companies. Again, I would be very interested to hear from them as well.

  7. Maxims

    Thank you so much John and Mary for speaking out. I don’t find anything inflammatory in this piece. It is just brillant and reflects accurately the industry’s opinions over Brexit. Thank you for your extraordinary work !

  8. Jonas

    I’m not so sure, I’d like to see a brexit to rid the continent of a top down government, racist descrimination of the current immigration (non EU migrants vs EU migrants) policies and to improve overall democracy.

    As a Swede working in aviation, and living in the U.K, I would back a Leave (if I was able to vote) as I see this as the stronger of the options. It seems most of the British people are currently lacking in the patriotism and strength optimism they once had. I just hope for their/our sake we can all untie and move on swiftly after this vote.