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Analysis

May must face facts to pull airlines out of Brexit nosedive

by Luke Lythgoe | 14.12.2017

The UK’s aviation sector is particularly exposed to Theresa May’s hard Brexit. Her willingness to blur red lines to stay in the EU’s air safety agency is a start. But more is needed, and fast, to avoid a crash landing.

When the Brexit talks on a future EU-UK relationship finally start, the government will tell the EU that it wishes to stay in the European Aviation Safety Agency (EASA) under the indirect jurisdiction of the European Court of Justice (ECJ), according to Sky News reports. The move is partly in response to pressure from the US Federal Aviation Authority, which has given Britain weeks to come up with a legal structure for aviation safety. The alternative, the UK establishing its own agency, could take up to a decade, according to ADS, the UK aerospace body.

Norway and Switzerland are already non-EU members of EASA, using joint committees to keep the ECJ at arm’s length. In practice, this generally means the EU sets the rules and the others follow. This is losing control, not taking it back as Brexiters promised.

What’s more, securing EASA membership only solves one post-Brexit problem for the UK’s aviation sector, having internationally agreed safety standards.

A leaked European Commission paper, seen by the FT, made clear that if the UK leaves the single market it will lose its current, highly favourable, access to the EU’s skies. Instead Britain will be offered the same access as other non-EU countries. This would mean, for example, UK airlines losing the right to fly direct routes between two EU airports, say Berlin and Barcelona.

Easyjet, the UK’s biggest airline, plans to set up an Austria-based company, EasyJet Europe, to get round EU rules on airlines having to be based in the EU for full access to its aviation market. EasyJet’s UK-based aircraft will fly UK-EU routes, while EasyJet Europe’s aircraft will be able to fly internal EU routes. While this solution keeps planes in the air, it is also an economic hit to the UK. EasyJet may also have to force out British stakeholders, due to EU rules stipulating companies must be 50% owned by EU citizens to operate in the bloc.

On top of this upheaval, the UK will need to renegotiate the EU’s aviation deals with other countries like the US, so we can still enjoy them post Brexit. In the process, we may well end up with tougher terms.

Time is short. Airlines usually start selling tickets a year in advance, which means they will need a good idea of the future by this spring. Irish-owned Ryanair has threatened to start moving its aircraft away from the UK in September 2018 if a deal isn’t in the offing.

It seems to be dawning on May’s government that there is no good Brexit for Britain’s aviation sector – which employs nearly a million people and carries more than 250 million passengers each year. Her current strategy of allowing the ECJ “indirect jurisdiction” might plug some critical holes. Staying in the single market, like Norway, would solve even more problems. But better still is pulling out of this Brexit nosedive altogether.

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Edited by Hugo Dixon