The number of British air passengers could drop by 3-5 percent by 2020 with an expected downturn in the economy and fall in sterling following the Brexit vote, the International Air Transport Association (IATA) said.
“In other words, the outcome of the referendum could reduce air passenger growth by 1.0-1.5 percentage points each year over the near term,” the industry group said in an analysis. 
Air freight will be affected by lower international trade in the longer term, it said.
The regulatory impact on the aviation sector would depend on the nature of the exit terms and future arrangements between Britain and the European Union. 
“In effect the choice comes down to a trade-off between two key issues; access for UK airlines and customers to the European Single Aviation Market and policy freedom for the UK to set its own regulations,” IATA added.
The main points of the report are:
* The UK has voted to leave the EU — the so-called ‘Brexit’ scenario. Considerable uncertainty remains regarding the precise detail of the exit and it could be 2 years or more before these issues are fully resolved; prolonged uncertainty will influence both the magnitude and persistence of the economic impacts.
* Preliminary estimates suggest that the number of UK air passengers could be 3 percent-5 percent lower by 2020, driven by the expected downturn in economic activity and the fall in the sterling exchange rate. The near-term impact on the UK air freight market is less certain, but freight will be affected by lower international trade in the longer term.
* A big issue is with aviation regulation. The UK faces a trade-off between accessing the European Single Aviation Market and having the policy freedom to set its own regulations.

Source: Arab News