Published on : Friday, March 24, 2017
With earnest meetings taking place between EU officials and airlines in recent weeks, the major UK based airlines are roaring to be at the front of the queue when negotiations are concerned. There has been mounting concern from the airline industry that if discussions between the UK and the EU turn bitter, it could mean a major limp for them. The issue of Brexit is particularly acute for the airline industry given existing agreements allow companies to fly between the UK and EU – as well as between mainland European countries – and these will need be renegotiated before the UK formally exits the bloc.
EU Open Skies is the major sticking point, which is most of the times overseen by the European Court of Justice; however Prime Minister Theresa May wants Britain to be free of any impediment by ECJ rulings. Most airlines have some form of contingency planning in place, and in many cases this is now being acted upon.
This Luton-based company could be viewed as the most exposed to a hard Brexit because it is based in the UK and has only a UK and a Swiss air operator certificate, or AOC. The UK AOC, as things stand, allows the company to fly between the UK and EU countries (and vice versa) as well as between EU states. To fly between EU states post-Brexit, it is likely to need another AOC, because Switzerland is not a member of the EU. Just weeks after the EU referendum in June easyJet said it was in the process of applying for an EU AOC, which should be enough to allow it to operate intra-European flights after March 2019.
It is the most popular low-cost giant airline which is based in Dublin; which is why even once Brexit is done and dusted it will remain an EU company. This means the Irish carrier will not have any problems with its flights between EU states. However, with existing regulations, it will be better off for this airline as UK is an important market. If this does not happen and the existing EU Open Skies policy is not replicated, it might need to apply for a domestic UK AOC to fly its intra-UK routes.
British Airways, owned by International Airlines Group, does not fly any intra-continental routes and so would not be hit if the EU prevented UK airlines flying within the confines of the bloc after March 2019. The other airlines owned by IAG include Spanish-based Iberia and Vueling and Ireland-based Aer Lingus. This means, the wider group already possesses permission to fly within Europe. Qatar Airways owns 20pc of IAG, but it does so via its Luxembourg-based company, something that is likely to help it maintain the necessary 50.1pc ownership by EU-based investors to continue its operations.
With inputs from Telegraph