As a potential decision for the UK to exit the European Union ('Brexit') draws closer, many companies are seeking to evaluate the potential impact on their business. A new report from Moody’s Investors Service — titled "UK Brexit Would Create Prolonged Uncertainty Until Alternative Agreements Emerge" — tries to evaluate the degree of uncertainty in different industrial sectors.
The report underlines the UK’s trade surplus with the EU in aerospace products. In Moody’s view, the importance that the UK plays in the EU’s aerospace strategy and competitiveness would likely shield the sector from any major repercussions of a Brexit over time. However, the authors underline possible disruptive effects on supply chains.
In the aviation sector, the report states that the importance of UK air traffic would be a strong incentive to maintain existing agreements. Though a Brexit could affect the EU-US Open Skies Agreement, as well as the UK's inclusion in the Single European Sky initiative, Moody’s thinks it is highly likely that new agreements would, over time, be put in place, or that the UK would remain party to existing agreements, so as to sustain existing air traffic.
Airports, finally, are seen to be exposed, but the impact of a Brexit is unlikely to be material, according to the report.