Simon Calder: What does Brexit mean for British tourists travelling to Europe?

With Britain, somewhat unexpectedly, voting for Brexit there may be changes in the way airlines operate between the UK and the EU, and  there may be other implications for air travel from currency changes. Simon Calder, in the Independent, sets out some of the issues and what might happen. The exchange rate of the £ against the $ or the € may not only make holidays, to the EU or elsewhere, more expensive – but an increase in the price of jet fuel could happen if the £ weakens against the $. Through the “Open skies” agreement, since since 1994, any EU airline has been free to fly between any two points in Europe. This allowed easyJet and Ryanair to flourish, and forced “legacy” carriers such as BA, Air France and Lufthansa to cut fares. The UK may have to negotiates a similar arrangement to Norway, within the European Economic Area (EEA), in which case little would change.  But if Britain does not join the EEA, every route between the UK and the EU might need to be renegotiated on a bilateral basis. The bureaucratic logjam would be immense. Similarly, British Airways and Virgin Atlantic have easy access to America because of an EU-US treaty on open skies. The freedom for British airlines such as easyJet to fly within and between EU countries could be curtailed; nations such as France and Italy have in the past been protectionist of their home airlines. And much more  …..


What does Brexit mean for British tourists travelling to Europe?

The freedom for British airlines such as easyJet to fly within and between EU countries could be curtailed

By Simon Calder @SimonCalder   (Independent)

Our most intense engagement with Europe is when we go on holiday there.

With the peak travel season about to begin, millions of British holidaymakers are about to discover the immediate effects of the Leave vote in pushing up prices abroad. Longer term, there will be more big changes.

Will holidays cost more?

In the short term, the slide in sterling to its lowest level for year means the price of everything from a cup of coffee in a cafe in Paris to a night in a luxury hotel in the Maldives will rise.

The level of the increase depends on what level the pound settles at: before the referendum, the Treasury predicted sterling would lose 12-15 per cent of its value on a Leave vote.

Longer term, the two key rates are against the euro and the dollar.

The €:£ rate is crucial because we take the majority of our foreign holidays to the single-currency area: to the Spanish costas, the French countryside, the cities of Italy and the islands of Greece.

Further afield, prices in destinations including the US, Dubai and China will rise in proportion with the strength of the dollar relative to sterling; many currencies are locked to the US$.

Even if you never venture beyond Europe, the $:£ rate is also significant. Oil is priced in dollars, as are aircraft. So a 12% fall in sterling will push up the price of petrol, diesel and aviation fuel, as well as the cost of aircraft for airlines such as British Airways and easyJet.

Will I be asked to pay more for my holiday this year – or next?

Abta, the travel association, allows holiday companies to impose surcharges “when the cost of a package holiday goes up after you booked because of currency fluctuations (the euro growing stronger against the pound, for instance) [and] rising fuel costs (for flights and cruises)”.

The firm must absorb the first 2% of any increase, and if the surcharge goes above 10 per cent then you have the right to cancel.

If you have already paid for your holiday in full, it is unlikely that you will need to pay a surcharge.

The company will probably have hedged its currency requirements for paying airlines and hoteliers. Some firms will also have hedged, at least partially, costs for 2017 holidays.

Anyone who has put together their own trip, and has yet to pay for accommodation or a rental car, will find that the cost in sterling terms has risen.

Will cheap flights disappear?

“Open skies” represents one of the most tangible benefits of European Union membership. Since 1994, any EU airline has been free to fly between any two points in Europe.

The freedom to fly allowed easyJet and Ryanair to flourish, and has forced “legacy” carriers such as BA, Air France and Lufthansa to cut costs and fares. On any European journey you care to name, the typical fare is around half what it was in the early 1990s – and anyone who can be flexible about timing can save even more.

Before the referendum, some in the Remain camp speculated that open skies would be among the first arrangements to be binned.

If the UK negotiates a similar arrangement to Norway, within the European Economic Area (EEA), then little would change; Norwegian, a non-EU budget airline, flies successfully within Europe and from the UK to the US.

If Britain does not join the EEA. every route between the UK and the EU might need to be renegotiated on a bilateral basis. The bureaucratic logjam would be immense. Similarly, British Airways and Virgin Atlantic have easy access to America because of an EU-US treaty on open skies.

But given that London is the world hub of aviation, and a key destination for dozens of airlines, it looks unlikely that routes to and from the UK will be affected.

The freedom for British airlines such as easyJet to fly within and between EU countries could be curtailed; nations such as France and Italy have in the past been protectionist of their home airlines.

The chance to clip the wings of the likes of easyJet could be welcomed by politicians and airlines in other EU countries – if not by travellers. It is likely that airlines will restructure into separate UK- and EU-based corporate entities, adding complexity and cost, and reducing flexibility. Immediately after the result, Carolyn McCall, easyJet’s chief executive, said she had written to the UK government and European Commission urging them “to prioritise the UK remaining part of the single EU aviation market”.

How will passengers’ rights be affected?

The EU stipulates care and compensation in the event of disruption for airline passengers (and, to a limited extent, international train and ferry travellers).

These automatic rights would end for UK airlines when flying from British aorports, though EU airlines (including Ryanair) would continue to be governed by them. It is possible that a future British government would create its own rules on passenger rights.

Could using our phones abroad cost more?

Another tangible benefit for EU consumers has been the squeeze on the excessive roaming charges levied by mobile phone companies.

The maximum surcharges phone firms can add for calls, texts and data while abroad have just been reduced again. By next June they will disappear completely; that will happen despite the vote to leave.

Once Britain leaves, it is difficult to imagine any UK government saying to the mobile-phone firms: “As we’re out of the EU now, feel free to bring back excessive roaming charges.”

In addition, mobile-phone companies will start demonstrating a year from now that they can survive on zero roaming fees within Europe, and it may be that competitive pressure is sufficient to keep a lid on price rises.

What about British people who live in other EU countries?

The immediate impact for those who depend on savings or pensions in sterling is that the cost of living will rise; the exact amount depends on how the local currency strengthens against the pound. Longer term, the automatic right to live and work in EU countries will end, but it is likely that long-term expatriates will be able to stay.

UK passports and driving licences are “EU-branded”. Will we need to get new ones?

No, and for the time being new UK driving licences will continue to show the EU symbol and British passports will bear words “European Union” on the cover. But within a few years, when you renew either your passport or driving licence the design will change.

Some say we’ll need visas to go to Europe?

Yes, during the campaign some elements of the Remain side hinted darkly that we’ll all be queuing up outside the Spanish Embassy before we’re allowed to go to Benidorm.

The Green MP Caroline Lucas said that, in the event of the UK leaving the Single Market, “We would need to have visas.”

Yet the UK is second only to Germany in terms of the tourists it exports to other countries. Britain runs a massive “tourism deficit” (the excess of what we spend abroad compared with what we earn from foreign tourists), much to the benefit of bartenders from Benidorm to Benitses.

The suggestion that the governments of Spain, Greece, Portugal, etc would single out Brits for tougher treatment at the border is far-fetched. We will simply continue to show our passports on arrival, as we do now – as the UK is outside the Schengen Area.

Will there be border controls on the land frontier between Northern Ireland and the Republic?

Unlikely. There has been largely unrestricted travel between the two countries since 1921 under the terms of a Common Travel Area (which also includes the Isle of Man).

The government says: “A person who has been examined for the purpose of immigration control at the point at which he entered the area does not normally require leave to enter any other part of it.”

The Republic of Ireland will probably remain outside Schengen, and the current absence of frontier posts will probably continue.

We’re told always to travel to Europe with our EHICs. Presumably health care will get more expensive and travel insurance costs will rise?

European Health Insurance Cards indicate entitlement to public health care on the same basis as local people in EU countries.

But before joining the EEC (as was), the UK had reciprocal health agreements with many European nations.

We still maintain bilateral deals with 16 countries, such as Australia, New Zealand and the former Yugoslavian republics of Macedonia, Montenegro and Serbia.

It is likely that a similar range of deals would be concluded with some or all EU members. If they are not, then the need for travel insurance will increase – and premiums could rise.

What about duty-free?

When the UK leaves, it is likely that the limits that apply elsewhere in the world will be re-imposed. For alcohol, that means one litre of spirits, four litres of wine and 16 litres of beer – so no more filling up the boot with cheap claret in Calais.

The tobacco limit will be 200 cigarettes. Those limits are irrespective of In addition, a limit of “other goods” of £390 will be imposed.

A silver lining for airlines and cross-Channel ferry operators is that proper duty free would return; anyone who currently promises “duty free” for a journey within the EU is fibbing.

Looking at the UK tourist industry, the slump in sterling is presumable a benefit?

With weaker sterling, the rest of the world will get more pounds for its euros, dollars, yen, etc, making the UK a cheaper destination to visit.

Conversely, going abroad becomes more expensive for the British traveller, who may then choose to holiday in Cornwall rather than the Costa del Sol.

But it’s more complicated than that, especially in terms of British holidaymakers’ behaviour. Demand for overseas travel is price-inelastic.

If people find foreign holidays significantly more expensive, some may opt to stay in the UK. But between the summers of 2008 and 2009, when the cost of going abroad increased by roughly 25 per cent, the number of overseas trips by British holidaymakers reduced by a much smaller percentage.

Looking at foreign visitors coming here: EU rules allow European citizens to come to Britain with only a national identity card.

The UK government could re-impose the rule that all foreign nationals must have a passport, though the British travel industry would lobby strongly against anything that makes it more difficult for many EU citizens to visit the UK.



Britain leaving the EU: What could Brexit mean for travellers?

By Nikki Ekstein (Traveller)

June 24 2016

All eyes are on the European Union as the UK approaches its controversial Brexit vote. But ramifications of the referendum will be more far-reaching than any one continent. Given that London is the biggest gateway for international travel to Europe, a UK separation could create a storm of regulatory headaches, from immigration, to consumer protections, to airlines. Here’s what passport holders need to know ahead of the vote on Thursday.

Flying through Heathrow may feel more like flying through JFK-not in a good way.

International travellers passing through New York’s JFK will all commiserate over the brutal American welcome of a four-hour customs line (that’s the average wait time on weekends, according to a recent study led by various travel advocacy groups). At London’s Heathrow, queues move a lot more quickly, and that’s largely because EU citizens can enter through a separate line without any restrictions. If Brexit passes, those travellers could potentially join Americans and other international travellers in one queue for non-UK citizens.

Charlie Leocha, president of consumer advocacy group Travelers United, said that if Brexit passes, “getting in and out of the UK will be an absolute horror show.” As a member of the committee that helped raise funding for the installation of automated customs and border patrol kiosks in major American airports, he knows how long it can take to come up with solutions for these types of problems. “Improving the process for customs and immigration in the US took major cooperation from airlines and airports over an extended period of time. The problems we’ve had with this in the US are going to replicate in the UK – and it’s going to be a mess,” he said.

But others are more optimistic; Luke Petherbridge, public affairs manager for the Association of British Travel Agents (ABTA) and a co-author of the report “What Brexit Might Mean for UK Travel,” isn’t particularly worried about this point. “We can’t see that it would have any significant impact,” he said about the potential for expanded customs controls. “If you needed a visa before, you will still need a visa. And we expect that there would be an allocation of resources from the UK government to adjust for any passenger influx at customs and border patrol.”

On the other hand, arriving by train or ship shouldn’t change at all.

“If you travel through the tunnel from London to Paris, you go through French immigration in the UK and then through UK immigration in France-that’s how it works currently, and there’s no reason why that should change,” explained Petherbridge, who also offered reassuring words about cruise travel. “You’ve always had to show your passport at port on a cruise ship-that should be no different.”

Travelling to Europe may be cheaper ?

The finance world is bracing itself for economic turmoil next week should Brexit pass. The general consensus is that the British pound would take a hard hit on the heels of a split, which would have a domino effect on global economies. For internationals visiting the UK, it would likely translate to preferential exchange rates and more affordable vacations. Compounding matters is the possibility that EU nationals will also curtail their frequent visits to England; the travel booking site TravelZoo conducted a survey that revealed one in three Europeans would be less inclined to travel to the UK following a leave vote.

Reduced spending power in the UK also has its ramifications across Europe. According to the ABTA’s report, compiled with Deloitte, UK citizens spent 19.76 billion, or $28 billion, on outbound travel throughout the EU in 2014. Industry estimates put 10 million British travellers in Spain each summer alone. Ripple effects could create deeply discounted vacations across the entire Mediterranean, particularly in British-favoured destinations such as Ibiza, Mallorca, Tuscany, and Provence.

“This could be a good summer for Americans to head to Europe,” advised Leocha. Or next summer: Since many Brits will already have travel plans in store for this summer, it’ll take until 2017 to see the real effects of a reluctant British traveller base.

But affordable airfares may be harder to find.

Under Single European Sky legislation, any carrier based in the EU has the guaranteed right to operate freely throughout the continent. In the event that Brexit passes, carriers such as British Airways and EasyJet (which are based in London and Luton, respectively) will have to renegotiate their bilateral agreements with the EU to continue flying into Europe.

Consumer protections may take a dip ?

The EU has unrivalled consumer protections for travellers, compensating them on anything from delayed flights to cancellations due to natural disasters. That will continue for passengers (including non-EU citizens) on flights on European-based carriers to and from the EU. UK-based carriers will have to decide whether to live up to EU standards or chip away at consumer rights-as American carriers have done. Flight insurance providers such as Berkshire Hathaway may emerge as the winners here.

And so might (some) travel taxes.

On a recent phone interview, ABTA’s Petherbridge explained that the EU currently imposes a strict cap on Britain’s value-added tax (VAT), which would be up for revision following a leave vote. But there’s also good news about travel taxes. Under current EU policies, any flight departing the EU pays departure taxes as dictated by the individual countries. Considering the heavy entry taxes at Heathrow, it should come to no surprise that the UK is one European country that levies a departure tax as well.  ( ….and it goes on ….)

The big picture is still to be determined.

Even without taking into account the number of Brits who have vacation homes across the Mediterranean, ABTA reports that 1.3 million UK citizens live in other EU countries. Those homeowners account for millions of passenger seats on EU flights on their own-a single carrier estimates 2 million seats-while their friends and family members add nearly 9 million visits, according to ABTA and Deloitte. All this is imperiled by questions about homeownership rights that arise from a potential Brexit.

In the event that these rights are revoked or halted, there may soon be a glut of Mediterranean vacation homes coming to the market. But that’s unlikely, said Petherbridge. “The economic impact of abandoning those [expat] communities would be huge, so there’s a big incentive to continue some amount of cooperation,” he said. Still, he added that it would be “impossible to gauge how receptive either side would be at this point.”

That uncertainty is a running theme across all these issues, which hinge on sheer speculation until after Thursday’s vote. Even if the resolution passes, both Leocha and Petherbridge estimated that it would take two years to address the tangled web of concerns that could arise from the split.

The ABTA hopes that’s not the case. According to its official position, “the risks and uncertainties associated with the UK leaving the EU, both economic and regulatory, outweigh any potential upsides for travellers or travel businesses.”