As the chief executive of a company that is headquartered in Germany but listed in London, Tui’s Friedrich Joussen is well-placed to evaluate the challenges that lie ahead as Britain leaves the European Union.
“A strategy is needed to execute the vote,” he told City A.M. during one of his many trips to London.
“And it’s going to take longer than everyone thought to deliver.”
In a position paper published yesterday, the Department for Exiting the European Union said it was aiming for “frictionless” trade by minimising the number of extra checks on products after Brexit.
But Joussen said major structural changes to the customs system ought to be prepared for now.
“I’d expect to see ports being built and people being hired to manage customs border,” he said. “If you want to build them then you should be starting now, and the UK is not doing that.”
Tui is headquartered in Hanover, Germany, but it is set to become a non-EU company after Brexit because the majority of its shareholders will then be outside of Europe.
The company is preparing for Brexit by talking to “decision makers” in the process, but Joussen added that adjusting to the changes will be “too important to be a short term business decision”.
“I would advise negotiators to be as inclusive as possible,” he said. “Two years is a very short time.”
He said the main short-term effect so far on the company’s operations had been the weaker sterling, which affected its UK running costs. Prices have increased in any area which requires making purchases in foreign currency, such as buying fuel for Tui’s passenger aeroplanes.
The company has partly absorbed some of the extra cost caused by the weaker sterling itself, but it has also passed some of the cost onto holidaymakers.
But demand remains resilient among Tui’s 6m customers, which Joussen said was because holidays are still a high priority for the consumer. Revenue in the UK business was up seven per cent this summer, despite the higher cost of holidays.
“Vacations are very important to people,” he said. “If the price of bread goes up, you buy more expensive bread. If the price of vacations goes up, you buy a more expensive vacation.”
While he still believes in the European project, Joussen accepts that the Brexit vote was one of no confidence. “Politicians and business leaders, we have not made transparent the reasons it’s a good idea.”
The EU “needs to increase its remit”, Joussen said. He explained that he expected the organisation to be less insular in the next 50 years, as it expands to confront global issues like climate change, geopolitical tensions and terrorism.
Having headed up the company during a spate of terror attacks in Europe, Joussen is now optimistic that traveller confidence is being slowly rebuilt.
“People say: ‘I cannot let these people rule my life’. I think that’s right,” he said. “If we let terrorists dictate what we do then they have achieved a lot and we have achieved nothing."