Brexit Economic Impact

Introduction

The outcome of the referendum of UK on the continuity of EU membership (Brexit), in the form of the impending withdrawal from the EU, has highlighted the potential and impending significant changes the effect of which would be palpable on both the UK economy and travel and aviation sector. The withdrawal is slated to occur on 31st October, 2019 and the ongoing negotiations have not been able to discern any meaningful direction of the future relationships regarding the aviation sector, between the UK and the rest of the EU countries. In this context, the corresponding research proposal would be concentrating upon the evaluation of the economic impact which the selected companies of Jet2.com and Jet2 holidays could be experiencing while the withdrawal of UK from the EU could be completed in October, 2019. The proposal would be considering the background context of the research and the associated research problem in this context so as to highlight the explanation of the relevance of the future research. Furthermore, the proposal would be evaluating upon available and credible research literature associated with the context of the topic to better delineate the research perspectives concerning the impending economic effects and associated operational implications on the selected organisations due to the completion of Brexit. The research proposal would be also deliberative of the methodology of conducting the future research in this direction concerning collection of research data with particular emphasis on the selection of Secondary data sources and application of proper analysis procedures to evaluate the collected data. Finally, the ethical considerations associated with such a research process would be detailed about and the time scheduling format would be presented to highlight the research timetable.

Aims and Objectives

Aim

The research process would be striving towards determination and evaluation of the extent to which Jet2.com and Jet2 holidays could be influenced by culmination of Brexit.

Objectives

To identify the probable impacts of withdrawal of UK from the EU on the economic proceedings of companies such as Jet2.com and Jet2 holidays.

To assess the extent of the probable impacts of withdrawal of UK from the EU on the economic proceedings of companies such as Jet2.com and Jet2 holidays.

To evaluate the future corporate and financial prospects of companies such as Jet2.com and Jet2 holidays in the post Brexit scenario.

To recommend effective research solutions for future research projects in this perspective.

Background Context

The background context of such a research initiative has to be considered through a multipronged approach. According to Blackaby (2018), the UK hosts the largest aviation and travel industry within the EU of which, the Jet2.com holds a prominent place (with the headquarter, Low Fare Finder House, situated at Leeds Bradford International Airport) of being the third largest operator of scheduled and chartered flights within the UK in the domain of low cost airlines. In this context, it could be observed that, both the travel and aviation sectors are considerably extensive global industries which could be particularly influenced by the ambiguity surrounding the events of international politics and economy such as Brexit. The possible changes concerning the regulations of trade and financial operational mechanisms are, thus, poised to impart extensive impacts on the Jet2.com and the travel affiliate organisation, Jet2 holidays, which is, currently the second largest operator of tours and travels within the UK. In this context, it could be understood that in spite of the majority of the speculations and debates regarding the terms of exit of Britain from the EU is effectively underway at the higher political echelons, it has been the source of considerable discomfort and unease for the businesses such as Jet2.com and Jet2 holidays to comprehend the impending situations which could arise since it is imperative for the British business organisations to assess what to expect ahead so as to plan for the future after the Brexit comes to the procedural and administrative conclusion. To this effect, the research perception has been unequivocal in terms of gauging the significance of the probable economic effects of Brexit for the travel and aviation industry from the perspective of renegotiation and reorganisation of the aspects of the entire existing business arrangement in the current as well as future scenario.

Problem Statement

The point of contention regarding the ascertainment of the future economic implications of Brexit on the travel and aviation sector of Britain has been the uncertainty associated such a referendum by the UK. This uncertainty is related to the measures through which the continuation of business operations by the travel and aviation industry of UK be managed in the mutually beneficial manner with those of the rest of the EU. The expected overhaul of operations and associated financial implications on companies such as Jet2.com and Jet2 holidays have not still been determined from the accurate academic perspective. Thus, the corresponding research proposal is contemplative about the possible significant economic changes influencing the Jet2.com and Jet2 holidays, which, could be heralded in by withdrawal of UK from EU.

Literature Review

According to Bouoiyour & Selmi (2018), the problems could be extensive in terms of the financial impact of the withdrawal of UK. Registered airlines had been affected to the extent of the loss of 33% of their cumulative share value. Lim (2018), have observed that, in comparison to the other various economic sectors, the aviation industry at UK has been considerably influenced with the UK referendum regarding withdrawal from UK. The reason could be outlined as the fact that the private airlines at UK operate, still, under the legal auspices of EU where the agencies from EU direct the aviation laws of the UK. According to Pappas (2017), institutions such as European Common Aviation Area, European Aviation Safety Agency and European Court of Justice are responsible to regulate the UK laws regarding airspace operations. With the withdrawal of UK from the EU slated to be completed during October, 2019, the airlines such as Jet2.com, which are registered within the UK and could be operating the Air Operator’s Certification (AOC) of the UK, would have to halt their operations within the Inter-EU air routes. According to Moloney (2018), this could augur in disastrous consequences for both Jet2.com and Jet2 holidays since the travel agency offers holiday packages inclusive of services such as transfers, accommodation, baggage and return journey facilities through the Jet2.com flights with Air Travel Organiser’s Licence coverage under the purview of the financial protection scheme of the Civil Aviation Authority. This involves 48 separate destinations throughout the EU with particular focus on Greece, Balearic Islands, Spain, Canary Islands and Turkey. All of these economic and business activities could be jeopardised after Brexit could be concluded.

According to Pappas (2019), low cost airline operators such as the Jet2.com are already experiencing considerable trouble regarding the incremental fuel costs and various other airlines such as Monarch and Flybe are facing bankruptcy. To add to such complications, the EU had negotiated with the USA regarding the Open Skies agreement. With the withdrawal of the UK from EU, the deal would exclude the UK from accessing the decided upon air traffic routes between the EU and USA. The financial impact on the business prospects of both Jet2.com and Jet2 holidays would be catastrophic since the halting of operations for any indefinite period of time would be costing the two organisations direly regarding loss of revenue from passenger transport and the associated decline in number of travellers. According to Puscinska (2018), the IATA forecast about the impact on Brexit has outlined that the drop in the passenger volume in the British aviation sector due to the exclusion of the UK from operations through the EU air routes would be equal to 290 million.

According to Rosewell (2017), the uncertainties would be abound for the travellers who could be seeking to arrive or depart from the UK in terms of the miseries associated with cancellations, delays and bureaucratic entanglements. According to Tulkki (2019), this could be the outcome of the suspension of the Freedom of Movement based facilities with the institution of greater and extensive criminality checks for the personnel departing from UK to the rest of the EU. The disrupted services would be aviation, currency, mobile services and passport issuance control. Thus, the travelling propositions of tourists under the packaged tour programmes of Jet2 holidays are poised to be affected considerably.

As has been opined by Vrbaski (2016), the EU aviation legislations are to be adhered to by Britain to remain as a signatory of the European Common Aviation Area (ECAA) agreement. Jet2.com and other low cost airlines have to move to the European court of Justice for the resolution of any emerging dispute regarding the after effects of Brexit. In this context, Walulik (2018), have highlighted that Jet2.com is required to obtain AOC from any other country which could be the part of EU such as Austria, from where easyJet, Ryanair and Wizz Air have already obtained such a certification to operate within the EU even after Brexit. This would be vital for Jet2.com as, being a low cost airliner, it is required to perform as many flights as possible on a daily basis to earn the financial objectives.

Methodology

The above demonstrated research literature analysis, in tandem with the research topic, is indicative of the application of the Secondary data collection and analysis process for the performance of the future research project. The rationale could be outlined as the significant measure of probabilities and uncertainties which surround the context of the research topic. Thus, the application of Primary data collection and analysis methods could not be considered to be applicable since this would entail the selection of active research participant samples which is not possible in this context given the non-substantive nature of the research context. Thus, the research methodology is reflective of the significance of the utilisation of Secondary Research.

The methodology would involve the utilisation of both the Qualitative and Quantitative format of research literature review and data collection. The constructing of the research instrument has to be undertaken by the researcher through the consultation of the available documented literature for the purpose of addressing reliability and validity aspects. This would be involving evaluation of the collected, original and tertiary data through the examination of various related procedures such as data survey instruments, sampling of tertiary sources of data such as online databases, catalogues and bibliographies of government publications, company reports and conference proceedings. The Qualitative research regarding Secondary literature review primarily involves the facts and figures which have been recorded previously regarding the research topic. The initial one of such Qualitative Secondary research literature sources are official statistics which have been collected by the EU and the UK national governments through the various bureaus, agencies and departments. The availability and comprehensive nature of such sources are crucial in this context. Next, the utilisation of Technical Reports previously published on the other research works pertaining to the research topic could be undertaken. This could entail completed research projects or even researches which could be underway. Third, peer reviewed scholarly journal could be utilised so as to attain the maximised measure of accuracy and validity in the collected data.

Furthermore, the Researcher would be utilising the Quantitative data collection processes regarding the Secondary literature review. This would involve books, magazines, newspapers and online articles. Books would entail the application of financial theoretical constructs and models which could be effective in elaboration of the different strands of the future financial and corporate operations based effects of Brexit of the Jet2.com and Jet2 holidays. Magazine based sources could be considered to be travel and aviation sector specific sources from which the scholarly articles could be acquired. The newspaper based sources could be considered to be the primary elements through which updated knowledge and understanding could be acknowledged regarding the impending financial, operational and administrative effects of Brexit completion on the previously mentioned companies. However, it is notable that the utilisation of newspaper derived research literature has to be less in proportion in comparison to the alternative secondary data sources such as magazines and books. The rationale could be identified as the apparent dearth of analytical depth which plagues the newspaper based secondary literature. Finally, online articles could be utilised for the purpose cross checking the printed and published secondary literature pertaining to Brexit and the associated outcomes for the UK based travel and aviation sector operators. However, it has to be taken into cognisance that the measure of reliability of such sources could be probable to be compromised considerably. The Researcher would be excusing the opinions which could be derived from the online discussion based blogs since, the future assessors of the dissertation would be keen to not appreciate any such reference derived from online sources with dubious reliability.

Approach to Analysis

The furthering of the research project would be assisted through the utilisation of replication, re-analysis and re-interpretation of the existing and collected secondary data. These approaches would be providing the Researcher with the most extensive measure of opportunities for the engagement in the testing of different thematic frameworks, theoretical constructs and research design models. Convenience and cost effectiveness are the two most significant advantages of the mentioned analysis approaches. The elimination of the steps such as development of data measurement and collection of data points could assist in the swift completion of the research.

The analytical approaches would be associated with the extraction of the most relevant information through the application of the entire range of sources involving the previous study undertakings. This would augur in the fact finding processes in which descriptive information would be capitalised upon so as to support the research hypotheses with actual and reliable as well as authentic information based observations. This process would further involve the process of building of theoretical models through which the relationship between the existing research variables could be outlined.

Approach to Writing Up

The writing approach is associated with representation of the datasets which could be high quality in nature which could be collected through studies which are funded by different educational and professional research institutions. This could be effective in terms of utilisation of larger data samples which could contain meaningful depth. The conclusions derived from the data mining techniques would be utilised to highlight the trends regarding the organisational discourses in the aviation and travel sector. The writing approach would involve thematic analytical representation of data analysis outcomes to establish the match between the research hypotheses and the identified thematic constructs.

Research Schedule

Please refer to Appendix I

Ethical Considerations

Integrity and transparency maintenance are two significant ethical considerations which would ensure that responsibility of collecting data could be ethically contemplated as well as ensuring the consistency of the obtained information with authenticated and professionally endorsed information. Other ethical considerations would be to prevent disclosure of information which could be sensitive in nature and which could lead to re-identification of respondents of previous researches in this context. The infrastructures and services of national statistical institute of the UK (ONS) would be adhered to in this respect. To ensure authenticity of data, certain procedures would have to be prevented by the Researcher such as the micro-aggregation, data swap and random coding of different thematic strands which could be identified in the secondary research analysis. Regarding utilisation of every previous research paper, it is necessary for the Researcher to obtain prior ethical approval from the data endorsing institutions such as the ONS. Greater emphasis on aggregate data would be required such as financial statistics and macroeconomic information. This would minimise the overall risks of re-identification of the sources of primary research based data.

References

• Blackaby, D. (2018). The UK Economy and Brexit. In Emerging Markets from a Multidisciplinary Perspective (pp. 37-45). Springer, Cham.
• Bouoiyour, J., & Selmi, R. (2018). Are UK industries resilient in dealing with uncertainty? The case of Brexit.
• Lim, W. M. (2018). Exiting supranational unions and the corresponding impact on tourism: Some insights from a rejoinder to Brexit. Current Issues in Tourism, 21(9), 970-974.
• Moloney, N. (2018). Brexit and financial services:(yet) another re-ordering of institutional governance for the EU financial system? Common Market Law Review, 55(2), 175-201.
• Pappas, N. (2017). Brexit Referendum Influence on Londoners’ Overseas Travelling.
• Pappas, N. (2019). UK outbound travel and Brexit complexity. Tourism Management, 72, 12-22.
• Puscinska, A. (2018). European Aviation Club Conference on Brexit: Brussels, 11 December 2017. Air and Space Law, 43(2), 237-259.
• Rosewell, B. (2017). Infrastructure, policy, and Brexit. Oxford Review of Economic Policy, 33(suppl_1), S113-S123.
• Tulkki, J. (2019). The possible effects of Brexit to airline operations.
• Vrbaski, L. (2016). Flying into the Unknown: The UK’s Air Transport Relations with the European Union and Third Countries Following ‘Brexit’. Air and Space Law, 41(6), 421-444.
• Walulik, J. (2018). Brexit and Aviation Law. Routledge.

Appendices

Appendix I