CCT News

The Impact of Brexit on the Transport Industry

4th August 2016

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The impact of Brexit is still relatively unknown, however there has been considerable speculation on how could impact the future of the transport industry.

Here we have broke down a number of speculations by transport type.

Aviation:

How will the UKs access to the open skies change?

Low Cost Carriers (LCCs) have debatably gained from the free market principles of the EUs single market. The freedom of rules that allow businesses to set up bases in other countries with lower labour costs, from where they can manage the business from anywhere in the EU has been a clear benefit – especially without the additional red tape.

This has meant UK airlines have been falling over themselves when doing business with EU states as access to 500 million passengers has been a boon for the commercial aviation industry. There is a glimmer of hope on the horizon, and that is the ECAA or the European Common Aviation Area. The UK could join the ECAA and retain access but it would still need to accept EU aviation laws, and it would also depend on agreement from members that are already in the group. As on might imagine, they could be a little less welcoming.

Rail:

UK rail operators may experience an impact to their freedom they enjoy when tendering for franchises in the EU. Depending on the dynamics of Brexit, a new relationship between the UK and EU rail system will need to be established.  Chances are that the international trade rules that operate on a basis of reciprocal treatment are likely to mirror that of the EU.

As long as UK rail operators comply with the relevant EU safety and technical rules, it is likely they will retain the ability to tender.

Shipping:

The impact of Brexit on shipping may not be seen so drastically here. UK will always retain the right to ship goods to or from the EU. The benefit of being in the EU has meant that the UK has not had to pay taxes on moving these goods between ports. Once Brexit has concluded it’s business, we might still see some access to the single market but the degree will depend on the outcome of exit negotiations. Taxes may be incurred, or they may be able to exclude shipping from this altogether.

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