Brexit and Aviation 33

Today, I’d like to note a couple of items that shed light on the peculiar predicament of these times.

UK Parliament has an “Exiting the European Union Committee[1]” that is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Exiting the European Union and related matters falling within the responsibilities of associated public bodies. That’s a mouthful but it’s a committee that considers the details of the Brexit activities that the UK Government are undertaking.

Today, this committee published a report titled: The progress of the UK’s negotiations on EU withdrawal (June to September 2018), Ninth Report of Session 2017–19, Report, together with formal minutes relating to the report – HC 1554.  Love the Parliamentary language.  It’s not designed as a light bed time read.   As I was scanning the pages for interesting material on aviation I came across the reference to a “BREXIT – Risk Assessment” by AIRBUS from June.  I’d not seen this high-level 2-page document before.  Then came the moment I nearly fell off my chair.  To quote the text:

“Every week of unrecoverable delay would entail material working capital impact, re-allocation cost, cost for inefficient work, penalty payments to customers and up to €1B weekly loss of turnover. Despite the incremental stocks, the disruptions in a no deal Brexit situation are likely to add up to several weeks; potentially translating into a multi-billion impact on Airbus.”

My first though was – that must be a typo.  One billion a week!  Now, I know that AIRBUS has a healthy aircraft order book, but those costs are phenomenal.  Potentially a dreadful waste that no sensible company would put up with for any longer than was necessary.  I believe that would mean the UK losing its position as major civil aerospace manufacturing Country in short order.

The second item that caught my eye was the letter that ADS[2] got having written to the European Commission about the need for technical discussions to take place between the Civil Aviation Authority (CAA) and European Aviation Safety Agency (EASA) to prepare for Brexit.  Basically, the formal answer is that this is on hold.  I don’t find that the least bit reassuring given the time to do something useful is ebbing away.   This regulatory preparation is important for either of the two scenarios – that’s a Withdrawal Agreement is ratified or that “no deal” is agreed before withdrawal date.

[1] https://www.parliament.uk/exeucom

 

[2] https://www.adsgroup.org.uk/reports/24195/

 

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