THE LOTUS WEEKLY BREXIT ROUND-UP
Premier Inn hit by Brexit Uncertainty
On Tuesday Whitbread reported a 3.6% decline in like-for-like sales at the budget hotel chain, Premier Inn, which has more than 800 UK properties. It blamed weak regional market conditions due to Brexit uncertainty in the UK.
The company admitted that business confidence remained weak and leisure confidence was in decline “coinciding with heightened political and economic uncertainty”.
The UK economic and political situation was leading to weak hotel demand, especially from business travel demand in the regions.
Whitbread added: “With this uncertainty, it is difficult to predict how business confidence and business investment will evolve in the second half of full year 2020 and into full year 2021 and impact demand for short-stay, domestic travel.”
Heathrow Comments on Brexit as Holland-Kaye announces changes to slot rules
John Holland-Kaye, CEO of Heathrow Airport announced that the new runway at Heathrow would present a massive opportunity to lower fares but to do that the airport would have to change the slot rules to encourage greater competition. He also made the following comment about the ongoing Brexit debate: “Like most businesses we want certainty. It now seems that we are getting to a moment of clarity on that. We just want to get through this and move on.”
The UK economy is perfectly capable of thriving outside the EU, he said, adding: “When our backs are against the wall we come out fighting.”
Richard Branson comments on Brexit as Virgin Atlantic launches routes to Tel Aviv
In a press conference celebrating Virgin Atlantic’s new flights to Tel Aviv, Sir Richard Branson said: “Expansion at Heathrow is crucial to boost Britain’s economy and global connectivity, especially after Brexit”.
He continued: “Brexit is the saddest thing that’s happened to our country, and to Europe, since the Second World War and it’s done enormous damage to companies, to jobs, to the money people have in their pockets”.
He predicted that, if a second referendum were to be held, Britain would vote to Remain. “If you look at all the polls it looks like people realise they were misled and they would vote conclusively to stay in Europe, and I would certainly recommend that that’s what they should vote. If that happened we would see the pound roaring back up, we would see trade starting to come back to the levels it was before the last referendum and it would be happier days all-round.”
Last week city analysts Morgan Stanley, who previously noted the positive impact that Tui shares have felt from the collapse of rival Thomas Cook and recent Brexit hopes, said they expected the company’s earnings to be below consensus forecasts. This precipitated a fall in the company’s shares. Jamie Rollo from Morgan Stanley predicted the slow down would be due to the grounding of the Boeing 737 Max jets, the UK economic environment, consumer confidence in package holidays and the high degree of uncertainty in the UK even if Brexit is resolved because of the resulting shift to later bookings and its impact on margins. The analysis came as TUI announced new routes and increased frequencies across multiple UK regional airports for 2020, which added two million more seats for 2020.
Last week was the week in which
- Parliament voted in favour of the Boris Johnson Withdrawal Agreement Bill (WAB – aka the deal) with the EU
- Parliament voted to reject the tight timetable for passing WAB (thwarting the do-or-die’ pledge to leave the EU with a deal by 31 October
- The PM admitted that Government can’t deliver Brexit on 31 October and announced that the current Parliament had run its course (the DUP underlined that it would not support the Government on its current deal) and declared a desire for a General Election on 12 December
- The EU delayed its decision to grant the UK an extension until they know what Parliament wants. Unless the extension is approved, the UK will leave the EU on Thursday
- Labour said they won’t agree to an election until they know what the EU’s decision is.
- This means the UK could still crash out without a deal agreed – especially as President Macron wants to veto an extension
- Boris Johnson tweets to the nation: OK, hi folks
- The Lib Dems and the SNP made an offer on Sunday to amend the Fixed Term Parliaments Bill so that: the next election would take place on 9 December, three days earlier than under Johnson’s plans. It states that the new election date would be cancelled should the EU fail to grant a three-month Brexit extension. NB: the PM does not want a three month extension
The week of 28 October is set to be:
- The week in which the Prime Minister Johnson will try and get a General Election voted on
- The week in which the EU decides to grant the UK an extension (or not). This decision due to be either Monday or Tuesday. The EU ambassadors are meeting today to consider a ‘Flextension’ until 31 January - meaning it can be brought forward if Parliament agrees on a deal before then. A draft text shows possible dates of 30 November, 31 December or 31 January.
- If the ambassadors don't set a date, the UK is set to leave the EU on Thursday, although this looks unlikely: EU President Donald Tusk has recommended an extension
- The week in which John Bercow will stand down - replacement yet to be announced