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.