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Brexit delays hub airport expansion

CCTV.com

08-04-2016 12:52 BJT

Britain's vote to leave the European Union has raised multiple questions about the future of the aviation industry in the country. Plane manufacturer Airbus had warned that Brexit would lead it to reconsider its investment in the UK. Budget airlines are talking of refocusing their strategies away from Britain. And all of this with the UK government still not having made a decision on how to expand the country’s hub airport capacity, as other European rivals grow market share.

London Heathrow’s claim to be the world’s busiest international airport has been grounded. Dubai now takes that title, and other international and European hubs are catching up fast.

Heathrow operates at 99% capacity and can only now grow significantly if a new runway is built here.

But a decision on how the UK should expand its hub status was delayed by the government immediately after the Brexit vote. Heathrow believes Brexit makes its case stronger.

"For Brexit to work for Britain, Britain’s gotta focus upon its long-standing strengths as a trading nation, it’s gotta look outward to the world..it’s gotta build its competitive strengths and it’s gotta build on its connectivity, so really Brexit Britain and a Brexit economy needs that long-haul connectivity even more," Heathrow's head of strategy Andrew MacMillan said.

The government now says it will choose how and where to build by October.

The BREXIT vote added another complication to the already long-delayed process of decision-making over airport capacity. But it’s also a real concern for airlines and the wider aviation industry here in the UK.

Ryanair wanted Britain to stay in the EU and now says it will shift its focus away from the UK to growing at European airports.

Easyjet has been looking at establishing a legal base away from the UK and has warned the slumping British pound after the Brexit vote is hitting its bottom line.

AIRBUS employs 15 000 people in the UK and has urged the government to move quickly on trade negotiations to secure its ongoing investment in Britain.

"My concern would be, you know, essentially Airbus remains largely controlled by German and French shareholders, and so when the next Airbus programme comes up, will there be pressure from a European-based company like that to actually manufacture the wings on continental Europe rather than in the UK," Tim Coombs with Aviation Economics said.

The UK aviation industry is worth around $80 bln annually. So resolving these issues favourably for it could be important if Britain’s Brexit economy is going to take off.

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