American Adds to Glum Europe Travel Forecast

Contributing Editor Carl Unger believes that every trip is worth taking. He loves an extended trip to Europe as much as he enjoys exploring the towns and landscape near home. Basically, you'll find him wherever there is good food, fresh air, and plenty of stories to bring home.

Carl has been writing for SmarterTravel since 2005. His travel writing has also appeared on USA Today and the About.com Boston travel guide.

The Handy Item I Always Pack: "It's not revolutionary, but a small Moleskine notebook is my one travel must-have. It's great for noting things you want to remember and it takes up hardly any space in your bag."

Ultimate Bucket List Experience: "Japan. I'd love to take a month off and visit the cities, temples, and countryside. I'm fascinated by the country's juxtaposition of ancient traditions and modern ambitions."

Travel Motto: “Why do you go away? So that you can come back. So that you can see the place you came from with new eyes and extra colors. And the people there see you differently, too. Coming back to where you started is not the same as never leaving.” –Terry Pratchett

Aisle, Window, or Middle Seat: "Window."

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Following recent announcements from Delta and United that they would cut back on flights between the U.S. and U.K., American has hinted that it, too, is expecting diminished demand to Europe over the coming months.

American president Scott Kirby said he expects double-digit revenue declines in the third quarter following a 6% decline in revenue in April, May, and June.

Mind you, this is to Europe, not just the UK. According to USA Today, Kirby “pointed to broader factors for European demand beyond Brexit, saying terror incidents, the overall economy and more competition from rival airlines each contribute to the decline.”

“We do expect Europe to get worse,” Kirby told USA Today. “There’s a lot of things that could be driving it.”

As far as the UK is concerned, Kirby said the Brexit had brought about three primary issues, specifically: “currency, [a] direct impact on flights, and general confidence in the economy.” Currency is of particular concern to the airlines—Kirby noted American gets approximately 4% of its revenue in pounds, so a substantial and prolonged depression of the pound is meaningful. (Delta cited similar concerns when it dialed back its U.K. flights.)

Still, American seems to believe that while Brexit presents challenges, it’s not a major concern. Yet. Kirby actually called the direct impact of the Brexit “positive” and suggested it could boost flights in the short-term as bankers, businessmen, and consultants fly more while sorting out the Brexit itself.

“I think for the next few year at least, there is not going to be much impact from Brexit,” Kirby said. “Hard to see any evidence that it’s a big problem.”

This seems to be the emerging narrative surrounding Brexit: A near-term squeeze on revenue and capacity, but not enough to cause any real panic. The truth is, no one really knows how the Brexit will impact travel beyond the next 1-2 years, while the actual “exit” part is being finalized. If we’re lucky, economic conditions will stabilize and this will be the worst of it.