As we began exploring in a series of Atlas articles on Brexit, the United Kingdom’s vote to leave the European Union is having a major ripple effect on the travel industry. Today we are looking at what should be on travel managers’ (TM) radars as they prepare their travellers and programs for a post-Brexit world. And if you haven’t yet, be sure to read our other two Brexit articles — about how British business travelers heading to the EU as well as how Europeans going to the UK will be impacted — since you’re bound to get lots of questions from your traveling employees.
As of this writing, there is still uncertainty about whether the UK will have access to an “open skies” agreement and whether low-cost carriers like Ryanair and easyJet will be able to operate freely between the UK and EU.
But that isn’t the only thing that will affect air prices. As Jeremy Quek, principal, air practice line lead with Global Business Consulting, the advisory arm of American Express Global Business Travel, points out, the fact that many companies based in the UK have announced plans to relocate part of their operations to maintain an EU base also will influence airfares.
According to a Reuters survey of firms employing the bulk of workers in international finance, around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the UK is denied access to Europe’s single market; Frankfurt was by far the most popular destination for the new roles, with Paris coming in second.
Another survey by Swiss banking giant UBS found that as many as 15 percent of EU companies with operations in Britain plan to move all of their UK staff out of the country after Brexit.
Quek says this exodus of jobs in and of itself will impact travel patterns. “In the immediate term,” he explains, “the activities associated with ‘relocation’ is likely to lead to demand growth outstripping supply, leading to an immediate increase in prices as airlines typically wait for the realized demand before looking to increase supply (number of seats).”
The change in travel patterns also have an effect on the balance/mix of certain suppliers within a travel program and the discounts they can offer.
“TMs need to be proactive to review the current negotiated rates in their contract and ensure that the rates are renegotiated to cover the change in travel patterns,” Quek advised.
As of June 15, 2017, roaming mobile charges across the EU were abolished completely following a long campaign and a series of staged price cuts. As of now, British travellers can “roam like at home,” as the slogan says, using their domestic allowance of minutes, text messages and data throughout the EU without incurring additional charges.
While it remains unclear what may happen after Brexit and if UK residents could see these roaming prices rise again, mobile phone providers certainly would welcome the opportunity to reintroduce roaming charges to British travellers heading to the EU and vice versa.
If that is indeed how it goes down, TMs and other department heads should take a close look at their travellers’ mobile statements and seek alternative solutions to reduce roaming charges. Depending on how much business travellers use their devices, you may opt for an international data package or encourage employees to use a secure Wi-Fi hotspot while on the road.
Under current European legislation known as EU Regulation 261/400, British travellers are entitled to compensation — up to €600 — if their flight was delayed by at least three hours or cancelled altogether, with a few exceptions. The airlines must also offer meals, refreshments and hotel accommodation as appropriate while passengers wait for their flight to be rescheduled.
According to the Telegraph, Aviation Minister John Hayes refused to guarantee that the law enshrined in EU 261 would remain in force after Brexit, and it will be open for members of parliament (MP) to decide whether to join nine other non-EU nations that abide by EU Regulation 261 to protect such rights for air passengers.
Especially with all the threats Ryanair’s CEO Michael O’Leary is making about the kind of travel disruptions and flight cancellations that will occur after Brexit if an “open skies” aviation deal isn’t met soon, we sure hope MPs make the right choice and protect passengers.
Another post-Brexit headache travel managers and HR leaders may have? Figuring out if their employees will need medical insurance.
Right now, as part of the EU, Brits have the European Health Insurance Card (EHIC), which entitles them to public health care on the same basis as local people in all other countries in the union. The “same basis” generally means nearly free medical treatment with some charges made in certain countries for things like prescription drugs.
We still do not know what will happen for EU citizens travelling to the UK or UK citizens travelling to the EU after Brexit — and if companies will have to begin buying medical insurance for their travelling employees — since no deal has yet been reached. However, it has been decided that UK citizens living in the EU at the time of separation will be able to keep access to their EHIC.
As the Independent reports, the EU is not prepared to open this part of the talks until it believes “significant progress” has been made on separation agreements.
So in other words, stay tuned!