Aviation & Brexit 97

The 40th G7 summit has taken place this week in Biarritz, France.  The 7 are Canada, France, Germany, Italy, Japan, United Kingdom (UK), United States (US) and the European Union (EU).  Japan and Canada have just signed major free trade agreements with the EU.  Otherwise the talk was of increasing trade tensions between the world’s biggest economies, namely: US and China.  The environment did get a look in given the wild fires in South America.

In the past, G7 leaders have recognised the “urgent need” for the aviation industry to adopt zero-carbon growth strategy.   Since there was no joint statement from this week’s meeting its difficult to tell if this continues to be an urgent concern.  The signs are not good given the empty chair when discussion with world leaders were on helping the Amazon forest and reducing carbon emissions.

The International Civil Aviation Organisation (ICAO) Carbon Offsetting & Reduction Scheme for Aviation (CORSIA) should also play an important role in achieving global environmental goals.  At a regional level, there’s the Advisory Council for Aeronautics Research in Europe (ACARE)’s long-term aim to reduce air transport CO2 emissions by up to 75% by 2050.  I don’t know if UK organisations will remain part of the ACARE[1] post-Brexit.  That may happen for those international companies wishing to remain with influence in Europe.

At his first G7 summit as UK Prime Minister, Mr Johnson was consumed by the thining quicksand of Brexit.  It’s said we have now gone from “a million to one” all the way to “touch and go[2]” as to whether the UK and EU agree a Brexit deal.

I’m wondering if Mr Johnson knows what “touch and go[3]” means.  Maybe he does and the “go” will be a last minute extension to forge a final agreement on the Irish issue.

One subject the Brexiters are looking at is cutting the UK’s Air Passenger Duty (APD).  APD was introduced in 1994.  It has grown to be one of the highest taxes on flying in the world and brings in a considerable revenue to the UK Treasury.  The UK MP for the town of Crawley, that’s near London Gatwick Airport, chairs an Air Passenger Duty All Party Parliamentary Group that meets in Westminster.  They are pressing the UK Government’s finance ministry to drop the tax to boost flying after Brexit.  What that will do for national and international environmental goals isn’t known.

A week ago, a leaked UK Cabinet Office Operation #Yellowhammer document was made public.  Setting out the likely aftershocks of a No Deal Brexit, it doesn’t make for pleasant reading.   It now appears that the document is from this month and not a historic document as some Ministers claimed.  In fact, a Government Minister dismissed this as “Project Fear” and “scaremongering” and yet the document is by the Government.  The report lists delays at EU ports and airports as one major risk.

The UK’s £36 billion aerospace sector is now faced with the work of preparing for a disorderly Brexit for a second time this year.  Without a doubt a No Deal Brexit remains the worst outcome for flyers and the aviation industry.  There are many UK businesses that are particularly vulnerable since they are not able to adapt.  Also, with the currency falling in value control may go to overseas buyers as they snap up good deals.

There is no mandate for a reckless No Deal Brexit but it seems increasingly likely.

[1] https://www.acare4europe.org/about-acare/members

[2] https://www.euronews.com/2019/08/23/g7-summit-begins-on-shadow-of-us-china-trade-war

[3] https://calaero.edu/what-is-a-touch-and-go/

Author: johnwvincent

Our man in Southern England

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