The UK Aviation industry is the largest in Europe and one of the largest in the world. It’s worth £60bn – that’s mostly through air traffic with continental Europe.
In a mini-series, we’re looking the most talked about Brexit aviation predictions.
On 23 June 2016, when Britain voted to leave the European Union, the subject of the henceforth known ‘Brexit’ has grown ever vaster.
Join us for this mini-series as we take a closer look at the Brexit Predictions. This week’s headlines:
Breaking News! Could Brexit lead to closing down the Open Skies Treaty?
What rules are required for a passenger plane to fly out of the UK and land overseas? This is just a day’s work for those managing the 3,000 departures from UK airports every day. In black and white, without a web of international agreements, planes may literally be left with nowhere to land!
The Open Skies Agreement, agreed in 2007 allows any EU Airline and any USA airline to take off and land between any point in the EU and any point in the United States.
This was a really important agreement for the UK - it created opportunities at London Heathrow and greater competition for transatlantic carriers. The previous agreement was airline-specific: access across the pond was only given to UK super-carriers British Airways and Virgin Atlantic and here in the UK only American Airlines and United Airlines could land.
The Brexit theory goes something like this: once the UK is no longer part of EU, the door to Open Skies could close and the clock would turn back to Airline-only agreements.
How likely is this scenario?
Most observers feel that this is an unlikely outcome. Even if a new US-UK agreement has to been drawn up, the expectation is that it would be a flexible ‘Open Skies’ style treaty.
Some even argue that such an agreement may not even be necessary… Why? The UK could have membership of of the ECAA European Common Aviation Area (ECAA) like other non-EU states like Norway and Iceland. ECAA airlines are included in the Open Skies Treaty and so this provides access to the US aviation market… still with us? But even that’s not guaranteed! It seems there are complications with each turn.
The jury’s still out on this one! Only time will tell the outcome, but Brexit negotiators certainly have a job on their hands.
Stop Press! UK-based airlines told to move to Europe after Brexit - or lose major routes.
One mainstream UK paper has reported that major airlines have been told that to continue to operate on routes across the continent (e.g. Paris to Rome) they must have a majority of bases on EU territory and that a majority of their shares must be EU owned.
Does this mean some airlines are more likely to restructure and relocate their head-quarters? There could be economic consequences for the UK including a migration of job opportunities to Europe.
Who would this affect?
Any airlines that fly intra-continental - easyJet and Ryanair* being the biggest players. The freedom to operate on routes across the EU has been a major part of their success, so they might be motivated to invest in growth (and therefore new jobs) outside of the UK to maintain their market shares.
How likely is this scenario?
How rigid these rules are does remain to be seen, but recent airline responses do indicate there is substance to this prediction.
easyJet has established a new EU operating airline ‘easyJet Europe’, registered in Austria – in aviation lingo this is known as obtaining an AOC (aircraft operators certificate). The move supposedly protects all of easyJet’s current flying rights within Europe. London Luton will remain HQ as it has done from day one and the airline has said ‘no jobs will move from the UK to Austria’.
It’s clear that some Brexit predictions have more certainty than others, but that’s just the tip of the iceberg...
Coming soon - how is a 300 year old rock getting in the way of aviation Brexit negotiations? And what happens if the UK leaves EASA?
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*although not UK-based, it has been reported that post Brexit, the airline's EU classified shares could drop to around 40%.