As I started this debate with my airline stocks down post last friday perhaps I can qualify my concern.
I hope that I am wrong, but...
...UK airports are booming. As they are in other countries. BHX also booming. Happy days.
🙂
However, a key driver of that growth is emerging economies and markets, and in the case of BHX in the last two years, eastern Europe. That growth is aided by free movement, which I have no doubt will remain for tourists. But if the growth to these markets has been driven by the free movement of the work force then that will cease unless the UK adopts an open borders policy - the Norwegian model - which the noises from the referendum and since are no way. So there is a risk that the longer term growth will be lower than present and I would not be surprised if services are cut.
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Coupled with this is the risk of a sustained lower value to the pound which will push up the cost of travel - oil is traded in dollars - and the cost of accommodation, currency, booze, plastic bucket and spade etc. So that could impact on the propensity to travel abroad on holiday.
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Whilst the cost of travel to the UK by plane will also be affected, the country could be more attractive to foreign tourists, which will help offset less of us popping over there.
🙂
Plus, if we go into a recession or a prolonged period of uncertainty, there will be a squeeze on business travel, which is a very considerable part of the UK's and BHX's throughput.
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There is a limited to all markets. The problem bhx has is the eastern European market is new, relative to London and Man, so it is not as established and probably more vulnerable.
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Jenny mentioned hyperbole in an earlier post - rest assured, no apology necessary and I was not offended. I would not described it as hyperbole. But I am sorting say brexit has created some pretty serious risks to the uk which are self imposed which the aviation and airport industry cannot ignore and be complacent about, hence the statement from BHX on Friday to reassure everyone.
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The trick now is what is the government is going to do in the long term interests of the country to minimise the impact I.e. support the pound, retain existing overseas investment (jaguar land rover, cadburys and the entire UK based car industry, financial sector all vulnerable to the imposition of tariffs), promote the UK as a welcoming country for everyone from everywhere (which it gave the impression it is not last week - by the way can we buy Farage a one way ticket to somewhere far far away?
👍) and manage this whole thing in a way so that the UK remains an open for business nation.
If not, then project fear becomes project fact and we can and deserve to expect the worse.
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As I say, I hope I am wrong on the last point.
