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The most immediate impact post- referendum was the effect on the dollar exchange rate, in which aviation fuel is purchased
Brexit is, of course, the big cloud on the horizon for UK carriers, and something that has already affected currency and fuel prices. On the Monday following the EU referendum, Easyjet warned of an extra £25 million in fuel and exchange rate costs because of Brexit and warned that revenue per seat would slide “by at least a mid-single digit percentage”. The most immediate impact post-referendum was the effect on the dollar exchange rate, in which aviation fuel is purchased. The doom-mongers pointed towards successive record lows achieved immediately after Brexit, but they came nowhere near 1985’s absolute low of £1/US$1.052 and, for a while at least, don’t look as though they will. It is undoubtedly making its mark, however, as Easyjet’s initial forecast of £25 million in extra costs was later upgraded by the airline to a £40 million hit because of the plummeting pound. In its annual forecast, the Global Business Travel Association (GBTA) says Brexit itself will not affect travel prices in 2017 but that “the uncertainty surrounding the exit could”. In terms of airfares alone, the GBTA says low oil prices may see global rates fall below 2015 levels next year, which will offset any unhelpful currency movements. One man who sees the picture from both sides of the North Sea is Christian Schindler,
Lufthansa Group’s UK and Ireland regional director. “At the moment, it is a blurred picture,” he admits. “We’re a Euro carrier, so everything is being affected by currency fluctuations – we’re making less money from UK point-of-sale, but if you look at the volumes, there’s not
68 BBT September/October 2016
IN PRODUCT TERMS, it is mainly the Gulf and US carriers that have most to shout about. Emirates is developing a new first class cabin, which will be a response to Etihad’s First Apartment, as found on Etihad’s Airbus A380s. Emirates will not go the whole way in rivalling Etihad’s The Residence, as the published £27,700 return fare from London to Abu Dhabi makes it something of a niche market. Emirates will instead offer something akin to Etihad’s cheaper single cabin, promising quality you would find on a first class train or luxury yacht. Meanwhile, Qatar Airways, which two years ago said it would in future only fit first class on its A380s, is preparing to unveil its new Super Business Class in November. Sliding doors and double beds are already confirmed, with the airline promising a “first class experience at a business class fare”, a strapline that will be familiar to Sir Richard Branson, as it was Virgin Atlantic that first coined it. Unlike the strapline, however, Qatar Airways believes its latest concept is so radical that it will patent it. Airlines also continue to develop the technology side. Lufthansa has begun fitting the group’s short-haul fleet with internet connectivity, having kitted out all 106 long-haul aircraft. A mix of ground and satellite-based connections mean systems are operational from gate to gate wherever the aircraft is flying.
STATESIDE UPGRADES In the US, business travellers will welcome a major upgrade from United Airlines, particularly those who remember the low point that it and other US airlines reached in the years after 9/11. United’s new Polaris business cabin will first appear on December 1 on Boeing 777-300ERs, followed by its new 787-10 and Airbus A350-1000s, with others retrofitted. Polaris promises to be a major leap for United, not just because all seats have aisle access, but also extras like slippers, plus mattresses and pyjamas on request. Nine Polaris lounges are
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