Month: February 2019

Brexit & Aviation 62

This week the focus has been on Northern Ireland (NI).  It may not be well known by everyone, but NI has a considerable Aerospace sector.  It’s continued success is vital to NI[1].  Aerospace contributes to over a £1bn a year to the NI economy.   It’s a deep-rooted industrial sector too.  I remember visiting Shorts Brothers of Belfast in the 1990s.  Today, Bombardier has a large workforce in NI[2].  From design to manufacture to support work, Bombardier Belfast specialises in major aircraft structures and flight control surfaces in metal and composites.  If the issues concerning Ireland become insoluble then the resulting EU-UK No Deal outcome of negotiations will damage NI and the rest of the UK.

In the UK, there are devolved administrations in Scotland, Wales and NI.  Exiting EU law applies equally across the UK but there’s concern that fragmentation could occur after EU exit.  There are efforts to ensure a common framework, but these don’t yet address aerospace or aviation with respect to UK law.   On leaving the EU single market the UK internal market needs to maintain a level playing field whist recognising devolved powers.

Brexit remains the top immediate risk to the growth of aviation in Europe[3].  Passenger traffic growth across European airports has been relatively high in recent years.  The UK leaving the EU with No Deal could lead to cap on flights and higher prices for customers.   There remains legal and commercial uncertainty for airlines on post-Brexit air travel[4].

At a time when there should be renewed intensity and seriousness to discussions and negotiations, we see the opposite from a succession of UK Members of Parliament.   Attempts to polarise and heighten tension are coming from those who foolishly wish to bring about a No Deal outcome.

Aviation cannot wait for the UK to strike an 11th-hour Brexit deal, so measures are being taken now.  With 50 days to run, time is tight.  Travellers planning business trips and family holidays after 29 March 2019 should do so with some caution.  Checking terms and conditions in detail would be a wise move.

[1] https://www.adsgroup.org.uk/about/ads-offices/northern-ireland/

[2] https://uk.bombardier.com/en/about-us/bombardier-in-country/sites/site.aerospace-belfast.html

[3] ACI Europe director general Olivier Jankovec said: “With less than 60 days left before the UK exits the EU, Brexit remains the top immediate risk.

[4] https://www.iata.org/pressroom/pr/Pages/2019-01-15-01.aspx#__prclt=QqEx89ur

 

Brexit & Aviation 61

Since there’s little, or no good news but there is news, it’s difficult to know where to start.  Forecasting is a fragile art currently.  We may be able to say that the UK will face a wet and windy week ahead, but we can say little about which political eb or flow that will dominate.  Thus, I’ll stick to what is known.

For one, in an aim to head off a meltdown, simplified customs processes for UK businesses trading with the EU, if the UK leaves the EU without a deal have been published.   Manufacturing, those with a just-in-time supply chain will be relieved to see goods waved through customs with a paper trail following behind.  Aircraft and parts may be allowed in to the UK at a reduced or zero rate of duty.

As the UK leaves the EU and becomes a “third country” it will cease to be part of the fully-liberalised EU aviation market.  To stay legal, knowing which jurisdiction is applicable in aviation regulatory matters is essential[1].  For this having a good understanding of the rules of ownership pertaining in the UK and the EU is a must.

For a month now, EASA has accepted early applications from UK AOC holders for Third Country Operator (TCO) authorisations.  This includes the need to produce a copy of Certificate of Incorporation/Business Registration.

For civil aircraft, it’s a matter of registration and that may not need to change.  There’s no single EU aircraft registry because the EU is not a “State” in respect of ICAO Annexes.  Each EU aircraft is registered in an EU Member State aircraft registry.  There may be implications on where an aircraft maybe kept if that is to be for a considerable period.

For organisations, the rules can be complex and dependent upon the structure of an organisation.  The authorities have issued guidance on this subject.  Where doubts have arisen, European and UK courts have been asked to rule on this subject in the past.  This I raised as a challenge for several large aircraft operators in my Blog 22 and 46.

For the licensing for pilots and engineers, the EU does not issue licences.  In every EU Member State, the national aviation authority issues licences, to standards set down by EASA.   Again, much has been said about the need for some form of recognition between EU and UK if Brexit finally happens.

54 full days remaining and there’s a mixture of options and possibilities on the table without the certainty that surely would be wise.  The burden falls on each and every individual and organisation to make a prediction and take measure to ensure that they can continue to operate.

If there’s a Withdrawal Agreement there’s a degree of certainty.  If there’s No Deal, then several temporary arrangements may not stop a calamitous impact on aviation in Europe[2].

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

[2] https://www.aerosociety.com/news/airbus-chief-warns-of-unbearable-uncertainty-of-no-deal-brexit/?dm_i=4OGU,H72Z,2ZCDRI,1Z8EL,1

Brexit & Aviation 60

Delay is the order of the day.  Now, there’s only 56 days remaining on the Brexit clock.  859 days since this all started with a June day.  One silver lining to the current dark Brexit cloud is that the UK Parliament is saying it won’t support a No-Deal Brexit.  However, there’s nothing to relieve the uncertainty hanging over the whole UK because even this expression of view is being ignored by the UK Government.  The UK Government says it will now redouble its efforts to get a deal.  Let’s hope redoubling is enough or surely it would be wiser to drop the whole project.

EU Council President Tusk, through his spokesman repeated that the Withdrawal Agreement on the table could not be renegotiated.   Next, the 9th February will see Prime Minister May’s 3rd attempt at a version of a Brexit deal supported by the UK Parliament.  Will it be 3 strikes and you are out?

In the latest information to UK citizens travelling to EU Member States every aspect of the advice is a degradation of exiting conditions.  Travelling post-Brexit, there’s only a downside for both passengers and airlines[1].

If No-Deal comes about there’s some highly optimistic commentators who believe that a “side agreement” between the EU and UK could cover some of the purely administrative content of the existing Withdrawal Agreement.  That said, even with this practical suggestion absolutely nothing is assured.

In the aviation regulatory world, it’s reported that the UK Civil Aviation Authority (CAA) is in the process of rebuilding itself after scalling back following the creation of EASA in September 2003.  The UK CAA has said it wants to stay within the EASA system after the UK exits the EU.  However, this possibility is looking unlikly for all the political reasons that are piling up every day.  The UK’s exit from the EU will have a severe impact on the UK aviation industry.

In civil aviation, large organisations have an Emergency Response Plan (ERP).   International standards recommend planning.  It’s normal, once a plan is in place to conduct an exercise to ensure that everyone has a clear understanding of its process and it stands up to rigorous testing.   I’ve been part of several such exercises in Europe.  My experience is that even with the most elegant plan, carefully prepared, the real-life impact of using it is often incredibly revealing.  Situations are constantly evolving, and all parties must move rapidly in order to anticipate risks and adapt accordingly.  Often communication and behaviours turn out differently than expected.

Yes, on both sides preparations are being made for the worst case No-Deal scenario, but they will all be untested.  If more than one crisis occurs at any one time more than double the effort is needed to resolve the situation.   The implementation of any such No Deal plan will not be a matter for one organisation but a continent of 500 million people.   If anyone thinks that will go smoothly, I just have to say that they have no experience of the real world.

[1] https://www.aerosociety.com/news/no-deal-no-flights/