Brexit fears grow in UK aviation industry

by Charlie Mitchell | 24.11.2016

Following an unsatisfactory meeting with Brexit secretary David Davis and aviation minister Tariq Ahmad last week, aviation bosses are growing increasingly concerned about Brexit. According to Ryanair chief executive Michael O’Leary, the government’s “mildly lunatic optimism” risks the industry being “walked off a cliff”.

The EU has hugely benefited airlines and customers since the early 1990s, when an aviation single market paved the way for mass travel around the continent. It gave any EU airline the right to fly between any two EU airports, hiking competition and pushing down fares.

In 2006, the European Common Aviation Area (ECAA) emerged, allowing non-EU airlines to participate in the aviation single market through bilateral agreements. In return they would comply with EU rules and regulations. Agreements exist with Morocco, Israel and Jordan.

British companies such as easyJet and British Airways have become trans-European businesses with hubs across the continent. The UK largely led the deregulation effort, and is today the world’s third largest aviation market. Last year saw a staggering 255 million passengers pass through UK airports.

But leaving the EU single market raises questions. Currently British aviation is underpinned by 155 international agreements. Of these, 42 are “air services agreements through our membership of the EU” according to the chair of the Transport Select Committee Louise Ellman MP, who raised this in a debate on transport and Brexit on 23 November. The UK is “involved in half of the top ten routes” within Europe, according to intra-EU traffic data. So there is an imperative on both sides to find an agreement.

The prominence of Britain’s airlines and airports makes continued ECAA access likely, even outside the single market. Since all membership standards are already enforced in the UK, a bilateral agreement could be implemented quickly.

But it is the seventh and ninth “Freedoms of the Air” – as stipulated by the International Civil Aviation Organization – that will concern industry bosses. The former permits any EU airline to fly between any two points in Europe, allowing easyJet, for example, to fly from Paris to Madrid. The latter freedom allows airlines to fly domestic routes in other countries. The single aviation market grants both freedoms to Britain, but a bilateral ECAA agreement may not.

Meanwhile EU carriers like Air France and Lufthansa may see an opportunity to reduce the competitiveness of British aviation. If UK airlines could not fly between different EU countries, EU airlines would be prevented from flying internal UK routes, something that would hit Irish carrier Ryanair particularly hard.

To offset this scenario, easyJet – whose share price fell dramatically following the referendum and has not recovered since – plans to establish an Air Operator Certificate in another EU member state, which “will secure the flying rights of the 30% of our network that remains wholly within and between EU states, excluding the UK”. Re-registering aircraft in another EU member state will cost upwards of £10 million.

Under a bilateral ECAA arrangement, Britain would have to conform to the EU’s common technical rules in aviation, but would lose negotiating and voting rights. This would not please those who voted Leave to wrestle back control from Brussels. In addition, Britain’s input in EU rules and regulation is substantial, after having been a driving force of the liberalisation of the industry in the 1990s, industry insiders told InFacts.

Moreover, ECAA agreements are often accompanied by close economic cooperation which, in the case of Switzerland and Norway, includes free movement of people. Perhaps such demands would be made of Britain.

Finally, if the UK agrees a deal to limit EU migration, British airports will need to implement more substantial border checks. In the first half of 2014, 11.38 million EU citizens visited the UK. Imposing hard border checks on them – which can take up to 45 minutes – would further overwhelm the UK border force.

For industry bosses, the central concern is timeframe. In order to adequately plan Ryanair schedules, “I need to know by March next year what’s going to happen in Britain in summer 2019”, said O’Leary. With an increasingly chaotic and secretive government, he is right to be worried.

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Edited by Stewart Fleming

One Response to “Brexit fears grow in UK aviation industry”

  • Davis is a self-confessed liar, and he is so narrow-minded and bigoted that he cares little about the fact that he is taking the whole nation of the cliff-edge.