Category: Aviation

Aviation & Brexit 80

It’s a week ago since I last wrote.  It’s been the week of Easter.  Politicians took time off and the news cycle found new stories to cover including exceptionally warm weather.   In terms of progressing towards a solution to the Brexit crisis nothing much happened.  Or at least nothing much happened in public.

Brexit continues to be a lose-lose proposition.  On both sides of the Channel the impasse rattles on.  All the energy absorbed by Brexit has weaken the economies of both the UK and the Continent.  CNN[1] recently reported that its China that is the big winner from Europe’s Brexit chaos.  That could well be the case, if not in the short-term then certainly in the longer term.

The European Parliament (EP) is now in recess until after the European elections at the end of May.  The new EP will be in place in July.  A new European Commission will be appointed.

This means UK holidaymakers will have to make a leap of faith if they are booking a beach holiday on the Continent this summer.  Since Brexit is delayed, but that could be cut short the assumption may be made that conditions remain; business as usual at least for a bit longer.

Since the referendum was first called in 2015 the UK pound (£) has fallen from roughly 1.4 Euro to the £ to its current rate of around 1.15 Euro to the £.   UK holidaymakers will need to take this into account when booking packages.  In all cases measures to keep aircraft flying will be in place but there’s a strong likelihood that higher fares and less choice are on the cards.

As a highly regulated industry the importance of what happens to regulatory relations matters a great deal.  Aviation cannot prosper without a mature and stable framework within which to operate safely.  All the international evidence points in that one direction.

The UK played a major part in the formation of the European Aviation Safety Agency (EASA), but it would seem to be stepping aside.  Regardless of what the UK does, EASA’s tasks within the EU-27 and its 4 associated countries will continue uninterrupted.   The UK’s possible withdrawal puts it in a difficult position with diminished influence.  Any withdrawal will significantly alter EASA’s cooperation with UK authorities.  Even in this peculiar situation there may still be a re-think but just now nothing remains untouched.

[1] https://edition.cnn.com/2019/03/27/europe/china-europe-brexit-italy-bri-intl-gbr/index.html

 

Brexit & Aviation 79

The European Union (EU) has agreed to extend #Article50 a second time.  This could delay any possible #Brexit until 31 October 2019.  What implications will this have on the UK while it remains in the EU?  A British Parliament House of Commons briefing explains the situation.  

The times we are in could never be called normal.  Brexit trundles on laying waste to everything it touches.  At the same time, British MPs go on a jolly Easter holiday as if nothing much is happening.  But political activists on the ground in the UK are busy campaigning vigorously for UK local elections and an almost certain European Parliamentary election.

Over the last week, talking to people in the US, those who are not avoiding the subject are as divided as we are in the UK.  The object of their division is one man.   President Trump is either the best President ever or the source of all a nation’s problems.  The Canadians I spoke to, are confused and mystified by the reported behaviour of the UK.

The event I was attending in Atlanta was run by Aviation Week[1].  They are reporting the substantial impacts of Brexit and there’s nothing positive to say on the subject.   The expectation is that it’s going to be a “difficult summer” to say the least.   The lack of clarity over all aspects of the UK’s current situation remains astonishing.   The danger is that it becomes easier to do business in other Countries and the industry avoids investment in the UK.

To say something positive, it was refreshing to see the UK’s Aerospace Wales[2], a trade body representing the aerospace and defence industries in Wales, was exhibiting in Atlanta.

[1] http://m.aviationweek.com/awincommercial/uk-airlines-airports-already-see-substantial-brexit-impact

[2]  www.aerospacewalesforum.com

 

Brexit & Aviation 78

The political cartoonists are having a field day.  Brexit is giving them so much ammunition.  There’s never been a more fertile time for creative portraits of the ridiculous antics of politicians.  Every metaphor you can think of has been tried at least once.  For me a picture of headless chickens just about sums it up.  UK MPs have had the chance to identifying a way forward but keep coming back to stalemate.

Unfortunately, that leaves the worst-case scenarios still on the table in law.  The worst-case being a No-Deal Brexit outcome.  Study after study[1][2] shows that a No-Deal Brexit threatens to put the aviation and aerospace sector at a significant competitive disadvantage in the UK.  Failure to secure a sound Brexit deal that maintains a good strategic partnership will cause significant supply chain and investment problems.  We must remember that an aircraft may have over 4 million parts. These components come from all over the world to be integrated into a product.

Although some politicians remain in denial this should not come as any surprise.  For one, the EU’s Single Market has over 500 million customers and an economy over 5-times bigger than the UK’s.  Before 2016, the Single Market was often championed by the UK because it made it easier and cheaper for UK companies to sell their products.  Now, we are in the Brexit Twilight Zone[3] there’s a pretence that these facts don’t matter.

In a sad way, it’s ironic that many voted for Brexit and leaving the EU in June 2016 with a view to protecting their jobs in fear of globalisation.  Now, UK jobs will be lost as it’s clear that the civil aviation and aerospace sector is entrenched in the EU.  Miltary spending alone can not support the thriving sector we have come to take for granted.

In a recent statement, the European Commission said: “A No-Deal scenario on 12 April is now a likely scenario”.   A “disorderly” Brexit by accident is still avoidable but it may mean a UK General Election or a further referendum, and if there was a long extension, there maybe participation in the 2019 European elections due to take place between 23-26 May 2019.  Since there’s still no coherent strategy coming from the UK Government, I suspect a long extension is inevitable.  The possiblity of a so called #flextension is already built-in to the existing treaty.  This could be agreed until say; 31 December 2019.   Such an extension could be shortened only if both sides agree.  That would be time enough to work up a coherent strategy with a workable majority in the UK Parliament.   

Update: Now the UK Prime Minister is seeking a further extension from the EU to delay Brexit until 30 June 2019.  So, that’s the starting position with an aim to try to aviod European elections being needed in the UK.  

[1] https://eandt.theiet.org/content/articles/2019/01/no-deal-brexit-threatens-future-of-uk-aerospace-industry-report-warns/

[2] http://www.imeche.org/docs/default-source/1-oscar/reports-policy-statements-and-documents/imeche-brexit-and-aerospace-report-final.pdf?sfvrsn=2

[3] https://en.wikipedia.org/wiki/Nightmare_at_20,000_Feet

 

Brexit & Aviation 77

The original Brexit transition date has gone by.  Am I comfortable writing this on 1st April?  Well it’s past lunchtime so it would now be bad form to make a joke about the whole debacle.

It’s another day of UK Parliamentary “indicative” votes or should I say evening?  We might imagine a compromise be sought and happiness reigns.  However, every time I hear a UK politician talk about compromise, they usually mean others coming around to their point of view.  The outcome of the “indicative” votes held by the House of Commons (HoC) on 27th March were received with disappointment but at least they were an attempt to move forward.   Regarding the future course of the Brexit the, UK Parliament is deeply divided on the big decisions, but voting patterns are starting to emerge.

Clearly, the international money markets think that a “soft” Brexit is the flavour of the day.  UK’s currency hasn’t ducked and dived too much for a while.  On the table is the proposal to remain in a Customs Union (CU) with the EU Member States.  This doesn’t explicitly touch on civil aviation although it does concern the movement of goods and services.  Implicit in this arrangement is close cooperation and collaborative working.  So, it’s conceivable that might extend to such possibilities as participation in European Agencies.

Whilst compromise and consensus are desirable and nice to talk about, the tone of the continuing public debate isn’t getting any calmer.  The BBC News Reality Check[1] team just published a reasonably worded assessment called “Brexit: Will flights be disrupted?”.  Reading some of the comments to this item posted on Social Media indicates that we have a long way to go.  The more polite ones are along these lines: I can’t believe people really think this is an issue, we few our planes before the EU and media starts scaremongering just before the Easter holidays.  The knee-jerk reactions of vocal Brexit supporters are to deem anything that paints their project in a negative light as: bias and scaremongering, regardless of its veracity.

There’s a tendency to ignore the fact that the single market in aviation has transformed flying for British air travellers.  There’s greater choice and competition and new routes across Europe and beyond.   It’s impossible to go back to the 1970s.  And who would want to go back to a State controlled industry without much concern for passengers?  Ignoring the reality that the EU has delivered is twisted and downright foolish.  After nearly 3-years no one knows what Brexit is or will become.  It’s a truly shocking situation.

[1] https://www.bbc.co.uk/news/uk-47225806

Brexit & Aviation 76

History gives us a context within which to set current events.  Rooting through some boxes, I came across a copy a UK CAA Safety Regulation Group in-house publication called “Aviation Standard” dated March 1991.  I kept it because it had a picture of me as a newly joined young airworthiness surveyor.  At the time the aviation industry was suffering the effects of recession and the Gulf War.  Pressure was on to keep fees and charges low but not to let up on essential safety activities.

What’s interesting is that 28 years ago the news was that the Joint Aviation Authorities (JAA) Headquarters was to move from London Gatwick to Hoofddorp, near Amsterdam Schiphol.  The 18 JAA Countries had decided to move from sharing office space with the UK CAA at London Gatwick to a new building in the Netherlands.

The staff newspaper had a large page describing the work of the CAA’s Systems and Equipment Department.  At that time, the department that I joined had 22 specialist design surveyors and supporting admin staff.  There were 5 technical specialist sections, addressing hydromechanical, cabin safety and environmental systems, power plant installation and fuel systems, and electrical and avionics.   This department covered all types of aircraft large and small, helicopters, airships and even hovercraft.

Contrary to the belief of some people, The UK has played a major part in shaping how aviation safety regulation developed in Europe.  What we have is as the result of concerted efforts over more than a generation.  It saddens me greatly to think that we are in the process of trying to dismantle that achievement.  An achievement that is recognised worldwide.

Back to the current challenge of Brexit and how it’s being exacerbated by political indecision and pure folly.  New Aviation Safety legislation has passed into European law ready to come into force if there’s a No-Deal Brexit.   The effects of this law are to create a breathing space so that companies can re-establish the approvals they need to operate.

Also, a new UK Aviation Safety Statutory Instrument (SI) was passed by both the House of Commons and the House of Lords and published as UK law.

The UK industry group; ADS has published a useful summary that is available on their website[1].  No doubt this will be updated as we discover if the planned leaving date of either 12 April 2019 or 22 May 2019 is to happen, or Brexit gets cancelled or delayed again.  Whatever UK Parliamentarian do it doesn’t seem the No-Deal Brexit outcome has yet been killed off for sure.

[1] https://www.adsgroup.org.uk/blog/no-deal-brexit-and-the-state-of-preparatory-aviation-safety-legislation/

 

Brexit & Aviation 74

It’s a good question to ask.  Will cooperation, coordination and convergence end with Brexit?[1]

An instant answer might spring to mind dependent upon your position with respect to Brexit.  Rather let’s look at the subject in more depth.  In my experience aviation safety regulation operates on 3-levels.  Each level is essential even though, from time to time, one may think itself superior to another.   Between the 3-levels there are dependencies.

  • One is political. No surprise.  Lawmakers are responsible for the high-level policy and the framework of law necessary to make regulation possible.
  • Another level is administrative. As is often said: the devil is in the detail.  Well crafted laws need to be drafted by creative people who know enough about both legislative and technical matters.
  • Of my 3-levels, the last one I mention, but it could have been the first, is the technical Without technically competent expertise the whole enterprise can be built on sand.

So, when asking what could happen to cooperation, coordination and convergence, I must address all 3.  There’s some freedom of movement but all the above need to comply with the standards set down internationally by ICAO.

In the event of a No Deal Brexit outcome the prospect of major disruption is real and should not be underestimated.  To my 3-levels there will be a shock to the system.  At the political level mutual trust will have to be re-established.  At the administrative level new processes or procedures maybe put in place.  At the technical level it’s less clear what new working arrangements may be needed.

Whatever happens with Brexit the laws of aerodynamics will not change.  The factors that cause accidents will not change either.   And airworthiness directives will continue to be issued.

Making a regulatory system work efficiently and effectively doesn’t happen overnight.  Prolonged efforts must be applied and sustained.  One or two big events can upset priorities very quickly.

Back to Brexit. Whatever those who sold the separation may have said, Brexit is sowing the seeds of disharmony.  Once the decoupling of plans has started so the drivers for action change too.

No surprise but this is significant in respect of the UK.  Historically, in the drafting of law and associated instruments (advice, guidance, notices and so on) there’s a tendency to reserve some arbitrary powers for those implementing the text[1].  EU law tends to be structured in a hierarchical manner with high-level objectives at the top and considerable detail at the lower levels.

In the last 25 years of European aviation regulatory harmonisation these two approaches have been blended.  When it works, people get the best of both worlds.  Unfortunately, Brexit is a divergence that has lack of certainly at its heart.  Several free marketers see a more arbitrary approach as a way of getting around the public interest whenever it suits them to do so.  Thus, cooperation, coordination and convergence between the EU and UK may not end with a big bang but a slow drift.

[1] In the early 90s, for applicants for approval, the need to “satisfy” a UK CAA Surveyor in the interpretation of notices and requirements was often wide ranging.

[1] https://www.mro-network.com/maintenance-repair-overhaul/

 

Brexit & Aviation 73

Reading the arguments made by those most enthusiastic supporters of the UK’s Brexit, even at this moment of acute crisis, they paint a picture of a so called: “managed No-Deal Brexit”.  There’s an illusion that somehow the fragile contingency measure put in place to temporarily mitigate some the worst damage caused a No-Deal outcome makes everything OK.  I call them fragile because none of the measure or guidance put in place has been tested or even been evaluated in terms of costs and benefits or been subject to much independent scrutiny.

The House of Commons libary reports that the UK is a party to some 800 international agreements negotiated by the EU.  That’s a complex and detailed framework established over many decades.  The UK Government will need to replace them if Brexit is to take place.   As has been referred to in this Blog, there are a significant number of aviation agreements to address given the international nature of the business.

One example is that; as a result of Brexit, the UK will cease to be a part of the European Common Aviation Area (ECAA).  Yes, some contingency measures are drafted to mitigate potential damage to air travel between the EU and UK, but they hardly substitute for the existing agreement.  Less is less for the UK.

Under current aviation rules, the EU’s Open Skies Agreement allows member airlines, including those registered in the UK, to operate in each other’s countries.​  As an airline, if you want to benefit from the existing Open Skies agreement post-Brexit, you must be majority EU owned[1].  Less is less for the UK.

In the field of aircraft maintenance, repair and overhaul, British licenced engineers will be losing some of the privileges that they now enjoy.  Individuals may find a way round this by holding multiple licences but at their own expense, in their own time and with less flexibility.

The issues surrounding the recent civil air accidents, highlight the importance of getting aircraft certification right first time and fixing problems quickly.  In Europe, aircraft design and production organisations are required to hold approvals.  These European approvals are much valued and well recognised.  There’s no safety benefit in being required to hold multiple approvals from regulators both in the EU and in the UK.  This is just turning the clock back for the sake of it.

This week, much has changed but much has remained the same.  An extension to the Article 50 process does give the UK Government a little breathing space.  A letter, a formal instrument of the Article 50 extension, has been sent after UK Prime Minister May agreed with the EU.  That has activated Paragraph 3 of the Article 50.

Will UK Politicians come to a rational compromise?  That’s anyone’s guess.  The consequences of No-Deal are huge and shouldn’t be discounted.  The cost of the EU membership is small when compared with the cost of Brexit.  UK Politicains need to honestly say: Brexit will make you poorer, do you still want it?

Surely, there’s going to be a lot of updates to air law in the coming months[2].

[1] https://www.independent.co.uk/news/business/comment/ryanair-brexit-uk-shareholders-airline-ownership-eu-airline-rules-no-deal-cliff-edge-a8817391.html

[2] https://www.aerosociety.com/events-calendar/brexit-what-now-for-aviation

 

Brexit & Aviation 72

Last week, new implementing procedures agreed under a Bilateral Air Safety Agreement (BASA)[1] between the UK and US, were discussed with the aerospace and aviation industry at the Embassy of the United States in London[2].

In the event of a No-Deal Brexit the UK would not be able to continue to participate in the European Aviation Safety Agency (EASA) regulatory system.  However, the UK is saying that design validation processes will be “similar” to those implemented under the existing EU-US bilateral agreement.   Also, there will be continued acceptance by the UK and US of each other’s aviation maintenance approvals.

The UK is working on other bilateral safety arrangements with the aviation authorities in Canada and Brazil.  These are the major aircraft manufacturing countries that have a long history of cooperation on aircraft certification and maintenance.  The international Maintenance and Certification Management Teams (MMT/CMT), both of which consist of representatives from the National Civil Aviation Agency of Brazil (ANAC), EASA, the US FAA and Transport Canada Civil Aviation (TCCA), are taking steps to mutually recognise each others approved organisations.

The UK Government has published updated guidance for the aerospace sector and is preparing for EU Exit[3].  Clearly more import-export agents are going to be needed in the coming years.  Everyone is preparing for the commercial impacts on all the sectors of the aviation industry.   The political and economic uncertainty continues to be unsettling.

Despite all the preparations that have been made, the EU’s European Economic and Social Committee (EESC) has warned that a No-Deal Brexit could “jeopardise” aviation safety standards[4].  That said, current No-Deal Brexit proposals are just temporary solutions.  Only a comprehensive EU-UK agreement will ensure the seamless air connectivity air travelers have come to expect.

 

[1] https://www.flightglobal.com/news/articles/uk-and-usa-sign-safety-accord-to-apply-in-event-of-n-456652/

[2] https://www.caa.co.uk/News/UK-signs-post-EU-exit-air-safety-agreements-with-USA/

[3] https://www.gov.uk/guidance/the-aerospace-sector-and-preparing-for-eu-exit?

[4] https://www.theparliamentmagazine.eu/articles/news/no-deal-brexit-could-‘jeopardise’-eu-aviation-safety-standards

Brexit & Aviation 71

I have an admiration for the staff at the House of Commons library.  At least someone is trying to keep track of what’s going on[1].

So far, there have been 475 Brexit related Statutory Instruments (SIs) laid before the UK Parliament.  That’s 79% of the expected 600 SIs. In other words, a great deal of new UK legislation that needs to be in place the day after Brexit.  What’s astonishing is that we hear nothing from our law-makers about these acts of law-making.  The total focus is on the uncertainly over the direction that will be taken by the UK.  There are statements that Brexit is “deadlocked” but there remain many choices that can be made.  However, unless something is agreed exiting European Union (EU) treaties will, by automatic process of law, cease to apply to the UK in 18 day[2].

This situation impacts treaties with non-EU Countries too.  A House of Commons library paper looks at the UK Government’s progress in renegotiating and agreeing replacement treaties with Countries outside of the EU[3].

The UK Government has published a policy on EU Air Services[4].  Unfortunately, there’s little new in the policy and it’s substantially worse than the current arrangements.  Airlines are enacting their contingency measures, but much remains unknown.   For example; Ryanair[5] have said:

“We welcome the Civil Aviation Authority’s decision to grant our UK based airline, Ryanair UK, with a UK AOC, allowing Ryanair to operate UK domestic routes and UK to non-EU routes in a post-Brexit environment.

The risk of a ‘no deal’ Brexit in March is rising, and despite our robust post-Brexit structures, including our post-Brexit plan around European ownership, we continue to call for the UK and EU to agree a transition deal from 31 March 2019, so that any disruption to flights and British consumer summer holidays in 2019 can be avoided.”

The robust post-Brexit structure they are talking about is to change the voting rights of British shareholders such that the rules of being a European airline can be met.

For travellers who contemplate booking holidays or flights to, from or via the UK it may be prudent to wait for a few days.   Certainly, there’s a need to take out travel insurance that can cover a flight cancellation as a result of Brexit.  The insurance sector maybe one that will be benefiting from the increase in uncertainty but that’s their job.

[1] http://researchbriefings.files.parliament.uk/documents/CBP-8370/CBP-8370.pdf

[2] https://interactive.news.sky.com/2017/brexit-countdown/

[3] https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8370

[4] https://www.gov.uk/guidance/air-services-from-the-eu-to-the-uk-in-the-event-of-no-deal

[5] https://corporate.ryanair.com/news/ryanair-welcomes-caas-issuing-of-uk-aoc-for-ryanair-uk/

 

Brexit & Aviation 70

I wrote the first of my Brexit & Aviation series a year ago.  Now, this is the 70th one.  A year ago, there did seem to be some form of honest negotiations going on.  Commentary often considered and reasoned over the pros and cons of different approaches to Brexit.  When I said: “Brexit is going to complicate aviation in Europe.” I didn’t realise the level of understatement those words entailed.   Complexity is one aspect of the problem.  It’s the confusion of not having a sense of direction that doubles the troubles.  It’s the legs that fake news strories get that is concerning.

“It has been quite shocking to get so far in the political process without having any real clarity about the future. That can’t be positive for the economy.”  That’s not my writting but that’s the words of Willie Walsh Chief Executive Officer IAG in their Annual Report.

Last year, the possibility that the UK would retain membership of the European Aviation Safety Agency (EASA) was real.  Now, bit-by-bit this possibility is waning as a predominantly anti-European tone has been set by the current UK Government.  The implications of Third Country status are being played out as preparations continue for a No-Deal Brexit outcome.  Industry is taking measures[1], and planning more, to insulate itself from the hard-line taken by Conservative politicians.  Large costs are being incurred and it isn’t going to be long before those cost get passed on to the paying passenger.  Although strangely there are some bargains offered for flights and holiday packages because prices factor in an incentive to overcome the caution and level of uncertainty people feel.

A year ago, I did say: “There’s a chance of reaching Brexit day with no clear vision of the future”.  My crystal ball must have been working overtime that day.  Lawmakers are not doing their job.  In normal times there’s a rigorous sequence that is followed that tests legislation before it hits the statute book.  The extream brinkmanship of the last year leaves the UK with a huge to-do-list and no time to practically test new legislation before it’s enforced.

There was an expectation that Bilateral Aviation Safety Agreements (BASAs) would be signed between the UK and others.  This would be used to detail the cooperation between the UK and others, including any mutual acceptance of certificates.  Unless I am mistaken, there isn’t much signed between anyone at this moment time.

A great deal of the difficulties that the UK faces are associated with the “red lines” that have been the policy for the UK Government.  These have tied the hands of all those involved in negotiations to such an extent that an impasse was inevitable.  UK Brexit advocates dismissed talk of duplication of activities and costs with no tangible benefits.  Nevertheless, that is the position the UK finds itself in.

Next week, if an Agreement is accepted the UK will have until 31 December 2020 to solve the thorny issues of international aviation.  During that time that UK will have many of the obligations of an EU Member State but no so many rights.   If an Agreement is not accepted then it’s back to the drawing board – again!  The prospect that Brexit will fail is becoming real.  Maybe that’s why the £ has gained value.

I think, the UK House of Commons is likly to reject Prime Minister May’s Deal next Tuesday.  Then on Wednesday it’s likly to reject a No-Deal outcome to Brexit.  An impass in the UK Parliament should then trigger a return to the people of Britain.  With so little time remaining on the clock an extended Article 50 period seems certain.  If I’m wrong in these predictions then I’m still no worse a sage than UK Ministers and MPs in Parliament if the recent International Trade Committee is anything to go by.

[1] https://www.aviation24.be/airlines/ryanair/ryanair-moves-spare-parts-from-the-uk-to-the-eu-in-anticipation-of-a-hard-brexit/