Air Malta stated (07-Jul-2011) it is aware of plans by its pilots' unions to conduct possible industrial action in coming days. CEO Peter Davies stated the proposed strike is a "totally irresponsible action" (Malta Times, 07-Jul-2011). Mr Davies, in a memo to staff, said talk of industrial action had already started to cause the airline “financial harm via loss of bookings and people deciding not to come to Malta during the summer”. He said action had already been taken on “waivers and favours”, which have resulted in a reduction of the company’s deficit by more than EUR10 million for 2011/12. Mr Davies said that if pilots proceeded with strike action on 16-Jul-2011, the gains they were seeking “will be outweighed by the short and long-term losses to the airline’s revenue and reputation”. [more]
Air Malta's potential pilot strike a 'totally irresponsible action': CEO
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Brexit follow-up Part 2: European airlines feel yield pressure; long-term impact unknowable
Part 1 of CAPA's Brexit follow-up report assessed the ASK exposure of UK and non-UK airlines to market segments where existing traffic rights could potentially change once the UK finally leaves the European Union. This second part reviews recent comments by leading European-listed airlines on how they see the impact of Brexit, both in the short term and in the longer term. Most of them acknowledge that there are considerable uncertainties, while simultaneously insisting that they will not be significantly affected in the long run.
There have been two initial impacts on airlines. First, Brexit has added to economic uncertainty, thereby muting demand and lowering yields. The magnitude and duration of this impact is unpredictable. Secondly, the consequent weakening of the GBP has made outbound international travel from the UK more expensive and less appealing, and lowered the value of GBP revenue earned by airlines.
The longer term impact will depend on whatever new traffic rights regime is negotiated between the UK and the EU. As a number of the airlines have acknowledged, this remains unknown and is, indeed, unknowable until the UK formally triggers its exit from the EU and then completes its two-year exit negotiations.
Brexit follow-up 1: airlines' ASK exposure today, and the possible changes to market access
CAPA's previous analytical coverage of the UK referendum vote to leave the European Union flagged several questions surrounding UK airlines' future access to the European single aviation market. Traffic rights post-Brexit will depend heavily on the wider relationship between the UK and the EU and its markets. In turn, this may depend on how far the UK is prepared to go in embracing the EU's four key freedoms: the movement of capital, goods, services and people.
The UK has not yet triggered its formal two-year exit negotiation period and all aspects of its future relationship with the EU remain unknown. However, politicians in the UK are very reluctant to accept the continued freedom of movement of people, so existing airline market access is likely to be compromised in some way.
Rather than speculate on how negotiations might proceed, this report identifies the main market segments that could be affected by changes to the traffic rights regime, and evaluates the ASK exposure of airlines from the UK and from countries in Europe's single aviation market to these segments. A further report will review recent comments by Europe's leading listed airlines on how they see the impact of Brexit.