Brexit and Aviation 48

The day has come.  After many months, a draft agreement and political declaration are in the hands of the UK and EU.  The term “deal” is being used to sum it all up.  That might not be the best word considering that so much remains on a wish-list, but that word has come into common usage.

In the run-up to the UK’s exit from the EU on 29 March 2019, if it happens, there’s no end of work that must still be completed.  There’s no doubt that if the “deal” is agreed there’s an enormous amount of Parliamentary work to be done passing the Statutory Instruments[1] needed to make it work in law.

Aviation needs a “modern stable regulatory framework” to support growth, says Henrik Hololei, Director General for Mobility & Transport, European Commission.  Whichever side of the on-going arguments you stand this remains a sound statement.  The future of aviation in the EU and its neighbouring countries, including the UK will be one of the major files handed over to the next Commission.

2019 is election year for the EU.  We can expect a whole new European Parliament and Commission to be up and running as that year matures.  The Brexit fall-out may land in new and different hands by the end of 2019.  The overall topics for debate and political climate may have changed significantly durring Romania’s Presidency of the Council of the EU.

Maintaining a stable regulatory framework that allows air transport to flourish in the UK and EU may yet meet even more challenges that just at this moment.  Turning the wish for a: Comprehensive Air Transport Agreement, covering market access and investment and aviation safety into reality has a long way to go.  We must hope that, subject to all this turmoil that no one drops the ball.  Aviation safety is far too valuable to be jeopardised by endless politically shenanigans.

There’s the expectation that the microsite[2] of the UK CAA will to be updated with information for the aviation and aerospace industries as the situation develops.

[1] https://www.hansardsociety.org.uk/blog/westminster-lens-brexit-statutory-instruments-dashboard

[2] https://info.caa.co.uk/euexit/

Brexit and Aviation 47

The “Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community,” dated 14 November 2018 is now published.

Aviation gets one mention in the draft agreement “International Civil Aviation Organisation standards related to biometric identification.”   In relation to Agencies, such as EASA the draft agreement says: “The institutions, bodies, offices and agencies of the Union shall continue to be competent for administrative procedures which were initiated before the end of the transition period …”.

So, it’s business as usual until the end of the proposed transition period.  Naturally, that depends upon the draft agreement being passed into law.  In fact, there are three options that are the most likely.  One: enact this withdrawal agreement, two: reject the agreement and abandon Brexit or three: reject the agreement and crash out.

The first two options are practical and viable but the third is an utter catastrophe for all parties.  There are just two ways to prevent disruption and to provide legal certainty to air transport and aerospace, at least for the short-term.

The hard fought, detailed, lengthy and binding Withdrawal Agreement only addresses the next few years.  To accompany the agreement there is a political declaration on future EU-UK relations.  In that document there is a high-level commitment to regulatory cooperation.  There is a wish for a: Comprehensive Air Transport Agreement, covering market access and investment, aviation safety and security, Air Traffic Management and provisions to ensure open and fair competition.

Unfortunately, of all the debate and amassed documentation there isn’t much more than that simple statement.  In other words, there’s some indication of the direction of travel but nothing on what that might that mean for the next decade.  Today, the best deal remains the one the UK has as an EU Member State.

It’s true, that the EU-UK political declaration may still be expanded in the next few days. The political declaration could grow to 20 pages but that hangs in the balance.  Contrast that with the over 500 pages of the Withdrawal Argreement.  It seems odd that it has taken well over 2-years to get to this point.

In parallel, the European Commission is working with its Agencies.  EASA is processing applications from UK organisations in preparation for the time when the UK will not be a Member State.  In addition, it’s doing preparations for the worst-case scenario – No Deal

Clearly, based on the domestic political reaction, there is no guarantee what-so-ever the UK will ratify the Withdrawal Agreement by 29 March 2019.  Parliament remains divided.   Only a committed gambler would predict which way events will turn next.

Brexit and Aviation 46

It’s reported that, International Airlines Group (IAG), the owner of British Airways (BA), has approached the Spanish Government for help over the possibility of a No-Deal Brexit.  They still seem confident that the EU and the UK will put an agreement in place that allows flights to continue even in a No Deal situation.   That said, current rules mean the company must be over half EU owned and controlled to be considered “European”.

Today, IAG is the parent company of Aer Lingus, BA, Iberia and Vueling.  It’s a Spanish registered company with shares traded on the London Stock Exchange and Spanish Stock Exchanges.  Today, the corporate Head Quarters for IAG is in the UK.  In Brexit and Aviation 23, I raised these issues but considering the airlines operating certificates rather than the ownership issue.  If IAG are to comply with the EU ownership rules then, essentially it becomes a Spanish company.  Now, I wonder if the UK Brexiters had that in mind in 2016?

Ownership arrangements do get complicated.  For example, 25% of London Heathrow airport is owned by Ferrovial, S.A., a Spanish multinational company.  London Gatwick airport is owned and managed by Global Infrastructure Partners (GIP) and a consortium of its co-investors.  So, I’m guessing that Brexiters don’t concern themselves too much with ownership and control.  It’s just not on their radar.

This is not a subject to ignore because despite liberalisation there are precise rules on ownership and control within EU legislation.  These are important in the EU but not so much as a matter of regional protectionism as to ensure that there’s a level playing field for fair competition between companies.

Last week, the European Air Law Association (EALA) held their annual conference in Brussels.  The EALA was created 30 years ago when the supranational European institutions, including the European Commission and the European Parliament, started to take policy and legal action in the field of air transport.

This year, their guest speaker was Director-General for Mobility and Transport, DG MOVE, Mr Henrik Hololei.  He confirmed that in respect of Brexit, that no detailed negotiations had taken place between the EU and the UK on air services and they will not occur until there is an agreement on the Withdrawal Arrangements.   Hololei noted that in the most extreme No Deal scenario, on the first day of Brexit there would be no flights between EU and UK.  This is a possibility depending on how the negotiations proceed.

In the No Deal circumstances, the UK Government maybe confident that it would be able to negotiate new, or reinstate old bilateral agreements with EU Member States.  The first of these might be possible, with good will on all sides but the second is just not possible.

The critical date of 29 March 2019 is approaching fast.  Jo Johnson has resigned as a Transport Minister, saying the country is: “barrelling towards an incoherent Brexit” and calling for another referendum.  Crunch time is here.

Brexit and Aviation 45

Ah the persistent and unpredictable ups and downs of Brexit.  One political lesson to be learned from this dreadful mess is that a powerful slogan pitched at an opportune moment on fertile ground can have a big impact.  “Take back control” means a hundred and one things to millions of people nevertheless those three words resonated on 23rd June 2016.  In Europe, we have spent 40 years taking down barriers.  This move has dramatically increased opportunity and prosperity for the majority but created an insecurity amongst some groups.  Control to them ment putting barriers back up.

In aviation, we recently celebrated 25 years of European liberalisation.  It’s only because of open markets that we now have one billion passengers flying.  We have high growth in a mature market which is globally unusual.  If we return to nationalism dominating ownership and control of organisations it’s inevitable prices will rise, and growth will be impaired.  Protectionism is a false God.

There’s no doubt that Europe has major infrastructure challenges.  The capacity and quality of our transport systems is inadequate.  In European aviation there’s strong common interests.  Lines on the map may work on the ground but in the air the current arrangements make little sense.  To solve these problems closer ties are needed not looser ones.  Closer ties are needed if we are to continue to prosper from international tourism.  In 2017, Europe remained the top visited region with more than 671 million tourist arrivals.

Close cooperation in safety and security essential.  Facing these critical challenges alone is not viable.  The only way to take control and have a real influence on the future is to cooperate.  One of the elements of European cooperation that is assumed to continue regardless of Brexit is the European Union’s Single European Sky (SES) programme.  Functional Airspace Blocks (FABs)[1] are a key tool of the EU’s SES programme, aiming to help reduce the fragmentation of air navigation services.  The UK/Ireland FAB aims to contribute to meeting key performance targets on safety, cost efficiency, capacity/delay and the environment.  Surely that stays?

The noisy voices that say the UK Government should sever all ties with the EU maybe don’t realise how that suggestion is extremely foolish.  Let’s hope the instability caused but the Brexit will be viewed in 25 years’ time as a temporary phenomenon.

[1] https://www.ukirelandfab.eu/about/

 

Brexit and Aviation 44

One of the great flaws of the UK’s Brexit is that it doesn’t seem to have a direction, if you put aside relentless uncertainty, that is.  What I mean is that there’s no high-level strategy that has been articulated by anyone with the power to implement it.  The results of #Brexit might just as likely be Labour’s socialist utopia as it might be a version of Conservatives for Trump.  Or even, more liklely a messy mish mash of lurching from political left to right in a purely reactive manner.

Often the UK has struggled with need to have a long-term vision.  One aspect of membership of the European Union (EU) has been that it has provided stability and a general sense of direction.  That has been a good compensation for the volatility of the day-to-day that keeps the media full of political stories in the UK.

That stability has been particularly true for Aviation and Aeronautics in Europe.   These are businesses that need a long-term strategy because of the commitment and time it takes to go from research innovation to in-service maturity of a product.  To succeed, civil aviation needs rules and regulations that are consistent, internationally compatible and that work.

On 5th December, there’s an #EU Aeronautics Conference[1] taking place at the European Parliament @Europarl_EN.   One of the speakers will be Tom Enders, the outgoing Chief Executive Officer (CEO)[2] of @Airbus.  It certainly will be fascinating to hear of his reflections from his time in office.  This annual conference has been initiated by the European Parliament’s Sky and Space Intergroup (SSI)[3].   It attracts high-level decision-makers from the EU Institutions including the Parliament, the Commission and the Council and the EU Agencies.  This year is fine, but I’m left wondering what the UK will do in future years if Brexit goes ahead.

There’s no doubt that innovation and investment are key part of any aviation strategy.  Being at the table when such subjects are being discussed is surely a matter of some importance.   I can’t think for one moment that the UK will not be interested in competitiveness, a level playing field, and sustainable and greener aviation.   Not only that but the unstoppable drive of digitization will impact everyone in the air transport system.   There’s also the issue of the need to maintain a skilled workforce and the shortages that limit development.  None of these big issues are for one Country alone.  In fact, no one Country alone can address them effectively and be confident of success.

It would be better if Brexit didn’t happen but if it goes ahead then the imperative must be to keep these important relationships working for the benefit of all Europeans.  We will not have to wait much longer to know what deal maybe proposed but whatever it is it will not be as good as what we have now.

[1] https://euaeronauticsconference.eu/

 

[2] https://www.airbus.com/newsroom/press-releases/en/2018/10/airbus-board-of-directors-selects-guillaume-faury-future-chief-e.html

 

[3] http://www.europarl.europa.eu/pdf/intergroupes/VIII_LEG_19_Sky_and_Space_20160608.pdf

 

Brexit and Aviation 43

There’s a sense of exhaustion with the Brexit process.  So much as been on and off over such a long time that it’s difficult to know what’s real and what’s pure speculation.  The “No-Deal” Brexit outcome has gone from “inconceivable” to “unlikely”.  Those who want to see such an outcome are in a tiny minority, but they do make a lot of noise.  All sorts of means are being used to try to influence the position taken by the UK Government.  When it comes to the Government’s published technical notices, I remined of this quote: “The single biggest problem in communication is the illusion that it has taken place.” – George Bernard Shaw.  There’s a lot of discussion about many issues but few solid reliable facts on which to base future actions.   That said, Minister’s statements continue to repeat that one of the Government’s priorities to secure an agreement on aviation and the European Aviation Safety Agency (EASA).

In preparing the aviation and aerospace communities the UK industry body ADS has launched an on-line site as a “Brexit Hub”[1].   This is a useful development as the UK and EU 27 continue to negotiate our long-term relationship.

Volatile noises left and right, up and down tend to dominate the British news.  This weekend there’s some moderation and talk of “mutual recognition” being a possible outcome of the on-going UK-EU negotiations.  One theory is that the “No-Deal” outcome is so unpalatable to both sides of the table that compromises are now sought.

Inside the EU, the internal market comprises an area without internal frontiers, in which the free movement of goods is ensured.  That includes aeronautical products that meet the appropriate standards.  A form of mutual recognition maybe a way of providing market access for products that are going and comming from a “third country”.

Naturally, this is not as simple as it sounds.  It does mean two separate regulatory systems need to be kept in lock-step.  Each notifying the other of any major changes that are planned.  However, the start point for both UK and EU is a good one in that technical harmonisation already exists.   Also, now in aviation, there doesn’t seem to be any great wish to diverge from current harmonised rules.

Another positive is that many aviation technical standards are international and are arrived at by consensus processes, engaging several competent authorities.  Therefore, a form of mutual recognition doesn’t need to involve absorbing large technical differences and different ways of doing business.  All of this would need to be written into a detailed agreement or working arrangement and that’s a big job for someone.

Problematic at this moment is the willingness of polticians to add a new barrier every day the negotiations continue.  This brinkmanship has to come to an end.  The consequences of a “No-Deal” Brexit, if it were to take place on 29th March 2019 are so horrendous that no one would want be responsibility for it.  Let’s hope that both the UK and EU work to secure a deal that delivers during and beyond Brexit, if it happens.

[1] https://www.adsgroup.org.uk/industry-issues/brexit-hub/

 

Brexit and Aviation 42

The roller-coaster that is Brexit continues to roll.  One day positive news and the next negative.  This week, British MPs were told that a Brexit deal would be done by the end of November.  A few hours later the Minister’s department was forced to correct the record and say there was no set end date for UK-EU negotiations.  With less than 150 days to go to the Article 50 end date, it’s like an aircraft on approach without any idea if there’s a runway ahead.  Government would do well to remember the rule about flying – Every take-off is optional. Every landing is mandatory.

There are several rules of the air that could apply to the current situation:

Flying isn’t dangerous. Crashing is what’s dangerous.

Never let an aircraft take you somewhere your brain didn’t get to five minutes earlier.

Remember, gravity is not just a good idea. It’s the law. And it’s not subject to repeal.

I’ve written often this year.  Now, 42 there’s a number to get to grips with as we reach November.  If you are not familiar with THHGTTG then you have missed out big-time.  Author Douglas Adams made that number the answer to the meaning of life, the universe, and everything.  Nothing I write here can ever match that answer.

Of note in the recent news is the European Parliament vote confirming relocation of European Medicines Agency and European Banking Authority after Brexit.  UK loses out on influence as these two Agencies move to ensure minimal disruption to the EU’s Single Market beyond March 2019.

Views of the foreign Press don’t make nice reading.  The German media have had quite a bit to say about how Brexit will affect everyone[1].  In Canada, they see the UK as being gripped by a self-destructive madness[2].  In the US, CNN says; Brexit is like a screaming child[3].  It’s clear that Brexit news won’t be slowing down any time soon.

The Treaty of European Union, known as The Maastricht Treaty, came into effect on 1 November 1993.  Today is the 25th anniversary of the Maastricht Treaty.  It was signed by Ministers from the then 12 Member States.  This Treaty is the one that avid Brexit supporters dislike so much.  I remember the political climate that year as being one of change and turmoil.  Change to the extent that I was elected as a County Councillor in Surrey along with 28 colleagues.

One innovation the Treaty brought to flying was that airport queues, solely for UK travellers were abolished in 1997.   The Treaty introduced free movement for EU citizens.  Now, the intention seems to be to dismantle that innovation, at least for British subjects.  Maybe that’s one reason the Chancellor put and extra £500 million in the budget for preparations for leaving the EU.

[1] https://www.bbc.co.uk/news/av/world-europe-45564684/brexit-what-does-germany-s-media-think

 

[2] https://www.theglobeandmail.com/business/commentary/article-a-self-destructive-madness-grips-the-uk-as-a-no-deal-brexit-looms/

 

[3] https://edition.cnn.com/2018/09/14/opinions/brexit-is-a-screaming-child-opinion-intl/index.html