How Would Brexit Impact The Travel Industry?

Despite the unrest that marred the early Euro 2016 matches in Lille and Marseille, the mood in Eurostar’s St Pancras departure hall was entirely jovial when I visited.

While the carrier had taken some precautions – including not serving alcohol – staff reported that fans of opposing teams were in fact uniting to sing each other’s national tunes on board. What’s football without a little Abba?

Eurostar is perhaps more concerned that a lull in business travel might be a sign of things to come in the event of a No vote on Thursday.

Chief executive Nicolas Petrovic told me Brexit could spell extra costs and uncertainty for the train operator.

"There would be a short-term impact, we can already see that the business market is slowing down very, very steeply," Mr Petrovic said.

"And in the long term, once again, it's all about the uncertainty: no one knows what Brexit means, and it could take a long time to understand. For our customers... that would add costs. The growth we have been enjoyed these past years would be diminished."

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But he said that the impact on fares, already relatively low, might not be significant. The French government owns 55% of Eurostar; some argue that it may be in their interest to ensure border control continues to run smoothly, for example by retaining the Le Touquet Treaty which allows French border control staff to operate on UK soil.

Perhaps the risks of Brexit are greater up in the air. Low-cost airlines have thrived due to treaties which ensure a single aviation area across Europe. EasyJet (Other OTC: EJTTF - news) claims that has allowed routes across Europe to almost double, and fares to fall by 40%.

In a post-Brexit era, access to the market could be unchanged, if like Norway, the UK could secure entry to the European Common Aviation Area.

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But that’s uncertain and with the fear that some airlines might even chose to switch bases, it’s small wonder that easyjet’s Dame Carolyn Mccall has warned that the era of cheap travel could be over.

A sobering thought for package holiday fans and the 1.1 million Brits who own a European holiday home – not to mention that two out of every three visitors to the UK comes from the EU.

On the other hand, her rival Willie Walsh, boss of British Airways’ owner IAG, dismisses such concerns, saying airlines like his, which have a more global focus wouldn’t expect to see a material impact.

Back on the road, the appetite among hauliers for remaining in the EU is mixed. The Road Hauliers’ Association says 61% of their members want out of Europe – citing red tape and competition from cheap foreign labour.

That might sound surprising when the risks of Brexit to exports (and imports) and additional border controls are considered; could Brexit spell fewer goods to transport and more red tape to contend with? In actual fact, figures from Eurostat reveal that over 90% of goods on trucks in the UK are loaded AND unloaded here; only a minority are exported or imported.

The implications for our transport sector are far from clear-cut.

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