Aerospace executives minding their own business at the Farnborough Air Show couldn’t help but notice that around them the British political establishment was in chaos this week.
The vote by the British to leave the European Union is shockingly out of synch with the thinking of typical Farnborough attendees, who come from all over the world and work in a business dependent on global openness to trade.
Early in the week, many of them clearly were in denial and believed that Brexit somehow wouldn’t actually happen.
At a press conference unveiling a big Airbus order for 100 jets on Tuesday, Tony Fernandes, the Malaysian entrepreneur and chief executive of AirAsia Group, said Brexit would not affect his Asian airlines.
“It’s an abberation, a mistake,” said Fernandes, who is an Anglophile. “That doesn’t stop our confidence in Airbus delivering aircraft, hopefully with wings.”
Airbus makes the wings for all its aircraft in Broughton, Wales.
“I still feel that Europe will be intact somehow and at the end of the day Britain will still stay in Europe,” Fernandes added.
Sitting beside Fernandes, Airbus chief executive Fabrice Brégier expressed his disappointment with the Brexit vote, but said “clearly we are committed to our 15,000 employees in this country.”
He referred to the visit to the Air Show the previous day by then-British Prime Minister David Cameron.
“As long as the U.K. remains business-friendly and supports — as David Cameron confirmed yesterday — our partnership on research and technology, there is no reason to change our plans,” Brégier said.
He acknowledged that Brexit creates uncertainty for some European airlines, which could see traffic fall and even market access curtailed. “Uncertainty is never good for us,” he said.
Still, he added, “The market globally is extremely positive,” citing air traffic growth above 6 percent. “So we are extremely positive about our business, even if Brexit might have some temporary minor consequences.”
It’s possible Airbus could even benefit from Brexit in the short term because of the fall in the value of the British pound and the euro. Airbus’s expenses in Europe are in those currencies, but its revenue is in dollars because that’s the currency used in buying airplanes.
Bjørn Kjos, chief executive of low-cost carrier Norwegian Air Shuttle, said his transatlantic flights from London to the U.S. may actually carry more passengers as a result of Brexit.
“It’s highly likely that when the pound is low the volume increases, because it’s cheap to fly into London,” he said.
Walter Stephan, former chief executive of aerospace supplier FACC in Austria — another European country going through tense political changes — said he didn’t expect a big impact on the business from Brexit.
And like Fernandes, he added: “I’m not sure Britain is on the way out.”
This scenario was elaborated on by British novelist Ian McEwan in an Op-Ed piece in the Guardian newspaper on the eve of the Air Show.
McEwan postulated that when Theresa May, who had favored remaining in Europe prior to the Brexit referendum, took over from Cameron as Prime Minister, she would, after a decent interval, accede to an outcry from establishment Tories for a second referendum.
On Wednesday, May was catapulted into position as Prime Minister unexpectedly early after Cameron suddenly resigned. She promptly named a couple of leading Brexit supporters to top positions in the government, including former London Mayor Boris Johnson, who became the foreign secretary.
May seemed to be acting on a principle that might be summed up as “you Brexit, you own it.”
Airbus and the wider aerospace community will have to live with a new political reality in Britain. When the next Farnborough Air Show comes around in 2018, Brégier likely will have to go through passport control.