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British Airways Seeks Brexit Tourism Boost as Ryanair Downbeat

  • IAG pledges to keep jobs and assets in U.K., maintain capacity
  • Discount rival predicts drop in fares, freezes fleet growth

British Airways owner IAG SA predicted a surge in inbound tourism spurred by a weakening of the pound after the U.K.’s decision to quit the European Union, just as discount rival Ryanair Holdings Plc said the Brexit vote is likely to depress demand and force carriers to cut fares.

IAG doesn’t plan to eliminate jobs or move assets away from Britain in the wake of the Brexit vote, and there will be no significant capacity cuts or fare discounting, Chief Executive Officer Willie Walsh said Tuesday in an interview in Brussels with Bloomberg Television.

“The U.K. now becomes more attractive for tourists,” Walsh said. “Corporates were pausing on the uncertainty, and now we don’t expect them to bounce back as we would have expected had the vote been ‘Remain.’ In the long run, such demand effects tend to even out.”

Ryanair CEO Michael O’Leary, interviewed at the same A4E industry group event, offered a starker analysis, saying he expects sterling to be weak for the next six to 12 months, compelling the low-cost carrier to “keep lowering fares to keep people flying.” Plans for growth in the U.K. will be put on hold, with 50 new planes due for delivery this year to be deployed in other markets.

Complex Picture

Carolyn McCall, who heads EasyJet Plc and also spoke at the Brussels gathering, came down somewhere in the middle, saying that while there may be some short- or mid-term “turbulence,” demand remains strong.