The UK could see a slowdown in air traffic growth over the next year as airlines shift capacity to other European countries, according to influential ratings agency Moody’s.
In its latest report, it said traffic growth in Europe would remain strong -around 5% to 7% – next year, but it forecast a slowdown in the UK.
Moody’s said the UK would be hit by the decision by some airlines to move some capacity to more profitable markets, including Germany.
As a result, growth in the UK would be only around 3% to 6%.
Over the first nine months of this year, the 10 largest European airports reported average passenger growth of 4.9 per cent, with Heathrow, the busiest, reporting a 3% rise.
"An improved economic environment, particularly in continental Europe, combined with continued low fuel costs, relatively contained air fare inflation, and growing airline capacity, will continue to stimulate demand for air travel and support the European airport sector’s positive outlook," said Xavier Lopez del Rincon, Moody’s vice president – senior credit officer.
The ratings agency is warning that Britain’s departure from the EU presents a further risk for the UK.
If the UK also fails to negotiate a new air traffic agreement with other European countries by the time it exits the EU, flying rights affecting around 80% of air passenger volumes will be lost.
