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Expert View

Airline rights to fly around world up in air post Brexit

by Denis MacShane | 06.03.2018

Denis MacShane is a former Minister of Europe and was a Labour MP for 18 years.

The UK is rightly proud of its airlines. But Brexit turbulence is undermining their interests in Europe, America and across the world.

The latest blow comes from America. Despite Brexiters’ hope that their new best friend, Donald Trump, would cut us some slack, his administration is resisting giving airlines such as British Airways and Virgin Atlantic the same flying rights post-Brexit that they enjoy today as part of the US-EU open skies agreement, according to the FT.

There’s a Catch 22. To fly within Europe, airlines must have over half their ownership in an EU country. But for an airline to benefit from America’s standard air transport agreement there must be “substantial ownership and effective control of that airline” by the other country or its nationals.

If we quit the EU, our airlines can’t be both majority owned by EU and UK interests. As a result, unless Trump takes pity on us, a UK airline won’t be able to fly both within Europe and across the Atlantic to America.

These ownership rules are playing havoc with our airlines’ strategies.

Easyjet doesn’t fly across the Atlantic but it does fly throughout Europe. So it has moved about half its fleet to Vienna and set up a new operations base there. That won’t be good for jobs in the UK.

Virgin Atlantic doesn’t fly throughout Europe but Richard Branson, who owns 51% of it making it majority UK-owned, is in the process of selling 31% to Air France-KLM. That could complicate transatlantic flying.

British Airways, which flies both across the Atlantic and throughout Europe, seems in the biggest difficulty. It is merged with Spain’s Iberia in a holding company called IAG. That will let it meet the EU ownership threshold post-Brexit but not the US one. The airline is facing a “crunch”, an unnamed EU official told the FT.

There could be similar problems with other countries too. The UK needs to replace 65 international transport agreements post-Brexit, according to the FT. Chris Grayling, the pro-Brexit transport secretary, said in October that he was making “rapid progress” in cutting these deals. But with the vital US talks stuck, where’s the progress?

As if this were not bad enough, we’re also going to struggle to cut a good deal for our airlines in the EU. Theresa May said in her Mansion House speech on Friday that she wanted to stay in the European Air Safety Agency in exchange for paying a kind of membership fee. Quite apart from the fact that the EU won’t let the UK “cherry pick” the agencies it wishes to belong to and the ones it doesn’t, we would lose influence over EU aviation policy if we become merely “associate” members. How’s that taking back control?

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Edited by Hugo Dixon

One Response to “Airline rights to fly around world up in air post Brexit”

  • Then welcome the future General De Gaulle Express from St Pancras to General De Gaulle Airport outside Paris to catch our flights to anywhere we wish to go in the world.
    Maybe domestic flights in the UK will be banned too? Even helicopters so the police would not be able to track criminals on the road?
    This is Brexit madness.