Aviation – Page 19 – John Vincent

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/

Aviation & Brexit 96

69 days left on the Brexit clock. Only a few days untill the UK Parliament returns from its summer break. And now 30 days to find an alternative to a hard border on the island of Ireland. Or is that now 28 days? That said, Brexiters have had decades to come up with a workable answer to that question so I wonder if a few more days will change anything. Now, the EU is waiting for “realistic, operational & compatible” proposals.

If the UK leaves the EU on 31 October 2019, the UK Civil Aviation Authority (CAA)[1] will take over the functions performed by the European Aviation Safety Agency (EASA) in relation to aviation approvals and certifications. The EASA’s mandate and roles as an Agency of the EU with regulatory and executive tasks in the field of civil aviation safety are not altered within the EU-28 and 4 associated Countries until the UK leaves.

Details about a non-negotiated EU exit and its impact on aviation and aerospace industries have been published. It’s worth having a look at “The CAA’s guide to Brexit No Deal & Aviation Safety[2]”. It’s well presented and a useful summary of the temporary measure in place. There’s one mistake on the final page on slide 13 where it references: “membership of the global aviation regulator ICAO”. The International Civil Aviation Organization (ICAO) is a specialised agency of the United Nations (UN). The UK has been an ICAO Member State since its origins. However, it’s not right to call ICAO an aviation regulator. It does publish Standards and Recommended Practices (SARPS) and its Member States are expected to comply with those SARPS. However, although ICAO conducts audits it doesn’t have a right of enforcement and thus is not a regulator. It can’t levy fines or amend or remove approvals or certificates. It doesn’t issue licences or directives. Aviation is a global industry, but it is not globally regulated.

In 31 days, the ICAO Assembly[3] takes place in Montreal, Canada. This is the international organisation’s sovereign body where major policy decisions are made for the next 3-years. ICAO’s 193 Member States, and many international organisations are invited to the general Assembly. Many working papers and information papers are submitted for the participants to consider. European papers are coordinated before the Assembly[4]. In this case they are submitted and presented by Finland on behalf of the EU and its Member States, the other Member States of the European Civil Aviation Conference (ECAC), and by EUROCONTROL. I imagine this situation will remain unchanged if Brexit happens since the UK will remain a member of ECAC and EUROCONTROL. At least as far as I know.

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

[2] http://publicapps.caa.co.uk/docs/33/CAP1714BrexitAviationSafetyE3.pdf

[3] https://www.icao.int/Meetings/a40/pages/default.aspx

[4] https://www.icao.int/Meetings/A40/Pages/wp.aspx

Aviation & Brexit 95

Thundering down the road like a man obsessed, UK Prime Minster Johnson stares the Brexit deadline of 31 October in the face. Some British people like this bravado. It plays well as emotions are manipulated in the heightened reality of a stage drama. Unfortunately, this isn’t a dramatic production this is real life.

In real life, the UK is not prepared for a No Deal Brexit. Separation from the European Union (EU) without a mutually beneficial, reasonable and rational deal has become almost a certainty. Forcing this situation on every walk of life in the UK is tragic.

The aviation industry is not ready[1].

Here’s another aspect of this situation that troubles me. I was an engineering student in the city of Coventry at the end of the 70s, beginning of the 80s. Large swaths of traditional British manufacturing were dying all around us. The UK Government’s approach was: “devil take the hind most”. Its crude free market thinking that I see in play now. It goes like this: we, the Government will not support you (industry) if you are not strong enough to survive a transformative downturn because that’s the test of your worth to the nation. So, rather than helping major employers bridge a gap, reorganise and build a future the UK lost or sold off potential future global industrial titans.

In aviation, travel maybe be governed by foreign exchange volatility in the short-term. In the long-term technology and the regulatory framework are the key issues. To suceed, the more harmonised regulations become the more of an enabler they can be.

Today, regardless of the domestic political machinations of Brexit there’s a global industrial transformation going on. Some people call it the fourth industrial revolution. Reading numerous intelligent commentators[2] on this subject it’s more than clear that the aggressive approach taken in the early 80s is completely hopeless when faced with what’s coming down the road.

As an internationalist, I’ll use some words that start with “inter” – interaction, interconnection, interdependency and interrelation. Connections between or among the people, things, or places are growing at an increasing rate. This will not slow down. More and more of everything around us is connected. In this world small minded nationalist thinking, barriers and walls are an anathema.

Brexit is hopelessly doomed. It encourages short-term reactive thinking, as we have seen over the last 3-years. It’s fuelled by hideously outdated free market thinking. It’s rejecting the power of cooperative working across Europe. In 72 days[3], there’s not much that can be done to reorient given such global trends. The conclusion is that Brexit must be delayed or preferably stopped. We (UK) are going down the wrong road.

[1] https://www.mro-network.com/maintenance-repair-overhaul/opinion-three-years-waiting-brexit-and-still-not-fully-prepared

[2] https://www.aerosociety.com/news/global-megatrends-and-aerospace/

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

Aviation & Brexit 94

Preparations for the UK’s Brexit continue but these times cannot be “normal”. New Conservative UK Prime Minister Johnson insists that the UK will leave the EU on the 31 October 2019 “do or die”. Bellicose politicians can be inclined to use outspoken language but in this case it’s more than even the House of Commons is accustomed too.

A sharp divergence for all to see. There’s the pragmatic and rational approach where judicious arrangements are made around an overall deal between the UK and EU. This is not exactly a win-win but it’s to get as close to it as possible in the current climate. At the same time, there’s the reckless push to sever relationships with only the minimum of temporary provisions at the lowest possible default conditions. This really is the lose-lose for both UK and EU[1].

Sitting in the South East of England, as I do, I see there’s a myopic element to this foolish “do or die” attitude. It’s a political approach that’s taken to satisfy a domestic audience as if the rest of the world doesn’t exist. However, the rest of the world can see what is going on between UK and EU and most reports aren’t complementary.

The next European Council[2] summit is 14 days before the UK is due to leave the EU. The agenda for that meeting in Brussels has yet to be published but Brexit is surely going to be on the list. On 19 October there’s to be big protest march through the streets of London. Organised by the European Movement and the People’s Vote[3] campaign this is expected to be a major historic event. So, a full 3-years after the 2016 UK referendum the final half of 2019 is going to be a rough ride for all involved and beyond.

Aviation companies, licenced people and regulators have been preparing for Brexit from the moment the UK Prime Minister’s letter kicked-off the Article 50 process. The stated assumption was that a UK-EU deal would be struck, and a reasonable degree of continuity would be maintained. In an inconsistent fashion UK Prime Minister Johnson has recently said that the chances of a No Deal Brexit are a million to one. This doesn’t seem credible given that no negotiations are on-going.

What does anyone believe in such a strange situation? With days to go, I believe it’s wise to plan for the worst-case scenario, of a No Deal Brexit with animosity on both sides. Services will be vulnerable to interruption. Transactions will be more complex. The regulatory framework will be uncertain. It’s highly likely some civil aircraft will be grounded because they can’t get the right parts with the right paperwork at the right time.

Post Brexit the UK will be viewed as a “Third Country” in respect of European legislation. A huge amount of work will be needed to re-build relationships.

[1] https://adage.com/article/digitalnext/lose-lose-beats-win-win/310805

[2] https://www.consilium.europa.eu/en/meetings/european-council/2019/10/17-18/

[3] https://www.peoples-vote.uk/

Aviation & Brexit 93

83-days[1] to the next scheduled Brexit cliff edge.

Large numbers of companies based in the UK have applied to the European Aviation Safety Agency (EASA) to be recognised as “third-country” organisations that are able to do business within the European Single Market[2]. Few consider that a purely UK approval will be enough to enable them to continue their international business. This is not taking back control from “bureaucrats” but giving them more work to do.

Many in the aviation industry, including myself did firmly believe that the UK would remain a member of EASA, despite Brexit. However, it seems we were wrong.

It’s important to recall that prior to the UK referendum the now Prime Minister Johnson was saying that we will not leave the European Single Market. Leave campaigners sold a story that, for all its incoherence and inconsistency, was simple but downright dishonest. Yet, every single time an “expert” points out the significant downsides of Brexit, almost faster than the speed of light, a volley of criticisms come their way. It’s a predicable range of statements from: just ignore them it’s “project fear” again to fake news by elitists having a hissy fit to stop Brexit. And then there’s the abuse that is much worse but the less said about that the better.

The claims now being made by Brexit supporting UK Ministers are that UK business wants certainty and the only way to get it is to force the issue on 31 October 2019. Given the level of turbulence and uncertainty that the last 3-years have brought us, these claims from a pretty rum bunch are a dubious and desperate justifications to say the least.

The UK Department for Transport (DfT) is responsible for several public bodies, including the Civil Aviation Authority (CAA). The UK aviation industry operates essentially without subsidy and so is not a big part of DfT spending. With Brexit there’s been a leadership problem. Who speaks for aviation in the UK Government? On my reckoning there’s been 4 Aviation Ministers in the last 3-years. That’s not good when it comes to setting policy and strategy. For one of UK’s foremost industries and under some jeopardy with a No Deal Brexit coming this is not good at all.

Aviation Minister at the DfT	From	To
Lord Ahmad	May 2015	June 2017
Lord Martin Callanan	June 2017	October 2017
Baroness (Liz) Sugg	October 2017	April 2019
Baroness Vere of Norbiton	April 2019	Now

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

[2] https://eandt.theiet.org/content/articles/2019/07/uk-aerospace-firms-fleeing-the-caa-over-brexit-concerns

Aviation & Brexit 91

90-days[1] to the next predictable Brexit cliff edge. The UK Government has still got a hell of a lot of work to do to get ready for a Brexit No-Deal scenario. The international currency markets have detected the fragility of the current situation and reacted accordingly. The British pound sterling is at 1.216 to the $ and 1.094 to the EURO as I write this short sentence. That’s an incredibly poor rate, even if you took the view that the pound sterling has been overvalued. British summer holiday makers are going to find this fact painful, but the flipside is tourist coming to the UK are going to have a great time. No doubt, air traffic will continue to grow to carry these welcome visitors from overseas. Unfortunately, in the short-term the threatened strike at British Airways (BA) may put a damper on that prospect.

The bigger issue is: what the state of the national currency says about the level of risk we are taking with Brexit. It’s not a vote of confidence. Currency rates may tumble further.

There’s a list of Brexit downsides and one is that British assets now look cheap to overseas purchasers.

I’m not saying that this is a specific example, but I noted with interest the sale of the British defence and aerospace group, Cobham to a US private equity firm for 4 billion pounds[2]. Today, Cobham employs 10,000 people. They were known for the development of airborne refuelling systems, which was a British innovation. This organisation is part of my aerospace design history. In the 1990s, on a regular basis, I visited what was then called; Flight Refuelling Ltd, just outside Bournemouth. I did numerous approvals of modifications to the Falcon 20 aircraft that they flew[3].

Sadly, the UK’s recent keenness to leave the European Union (EU) without a deal, on 31 October 2019 is like hanging out a big “For Sale” sign. Sound companies with valuable intellectual property look like a good buy. That said, this is not new for the UK. There are desperate periods in our history where selling the family silver was quite the vogue.

My point is that there are valuable British assets that look cheap to foreign investors given the uncertainties of Brexit. Which is ironic because it’s completely the opposite of what Brexit was supposed to be about, namely; take back control.

History always has lessons for us. Even recent history. I’d recommend an offering from the UK TV Channel 5 with Portillo’s series: “The Trouble with The Tories”[4]. He interviews many of the key players who brought the never-ending Brexit calamity upon us. I watched it and thought, just how useless knowledge with hindsight can be. Not only that but how dreadful British politicians are at assessing risk.

One thing I’m sure of, next week is going to another Brexit rollercoaster. It’s as if we have invented perpetual motion. It would be wrong to see No Deal as the end point or finish line.

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

[2] https://uk.reuters.com/article/us-cobham-m-a-advent/us-private-equity-group-advent-buys-uks-cobham-for-5-billion-idUKKCN1UK0NA

[3] http://www.aeroflight.co.uk/tag/flight-refuelling-ltd

[4] https://twitter.com/channel5_tv/status/1157040808845094912?s=20

Aviation & Brexit 89

The ancient adage that: “when in a hole, stop digging”, did once have meaning in British politics. No more. The rate at which deep political holes are being dug exceeds decades of measurement. As a strategy, knowing something to be a bad idea and continuing to do it should have a limited lifespan. A difficult reckoning must come. Well, that’s conventional thinking. With Brexit conventional thinking goes way out of the window.

The 2-year period provided for by Article 50(3) of the Treaty on European Union (EU) has been extended until Thursday, 31 October 2019. Including the summer holidays and that’s about 14 weeks away. Can a new UK Prime Minister (PM) secure a Brexit deal and is there time to get it through the UK Parliament by 31 October 31?[1] They’d have to be a miracle worker. There’s little working time left. Little time for deal making and little time to legislate. Given past performance, it’s feasible but it’s extremely unlikely.

The prospective new PM has said that his first task will be to launch a huge No-Deal Brexit public information campaign to help minimise possible disruption[2]. That certainly is going to be interesting in respect of air travel to and from the UK. The question is out there; will the UK Government be generous in providing financial support to businesses adversely impacted by a No-Deal Brexit?

There’s no doubt that UK airlines will be able to fly to the EU provided EU companies are permitted to fly to the UK. That’s the most basic international rules being applied. That said, at the heart of this immense political severance is the impact on people. Brexit will reduce European aviation employment opportunities for UK citizens[3]. However, it may create new domestic opportunities as the UK struggles to construct a credible regime to replace the European system[4].

If the UK is to make a full departure from the European system, it would require a period in which to sign special arrangements with the European Aviation Safety Agency (EASA), the US Federal Aviation Administration (FAA) and other global regulators. This hasn’t happened – yet.

The UK Civil Aviation Authority (CAA) will need to undertake a major investment and recruitment activity if it’s to take over necessary functions, and Bilateral Aviation Safety Agreements (BASAs) with all the mutual recognition agreements needed. Such major changes from start to finish could take a decade to complete in the major global aviation markets.

I wonder what public information campaigns are going to do in the meantime.

[1] https://twitter.com/BBCParliament/status/1152256880246476800?s=20

[2] https://twitter.com/itvpeston/status/1151589697975492608?s=20

[3] https://blog.aviationjobsearch.com/what-does-a-no-deal-brexit-mean-for-aviation-employment-opportunities/

[4] https://www.prospect.org.uk/news/id/2018/July/6/CAA-must-prioritise-skills-pay-Brexit-plans

Aviation & Brexit 88

Tuesday, 23 July draws closer and the naming of a new UK Conservative Party leader and subsequently a new UK Prime Minister (PM). It seems increasingly likely that the Conservative Party is going through the motions with only one outcome on the table: Mr Johnson gets selected and then pushes, in whatever ways possible, to get the UK to leave the European Union (EU) by Halloween this year. Little, if anything is new as repetitious and shallow arguments get thrown around like confetti for the bride of Frankenstein.

In the early months of this year there was a flurry of detailed articles written about how aviation would be affected if the UK left the EU with or without a deal. The common expectation was that the transition would start at the end of March. Since then a few have taken the time to update their positions but most of what was written remains motionlessness. Without a sense of political direction advancing policy positions is a precarious activity. However, a high-level desire to see liberal aviation market access arrangements continue does seem to exit within both UK and EU. To that extent, a No-Deal Brexit outcome represents a big step backwards for all Europeans.

Although it’s not relevant to international air travel, it’s notable that British media interviews continue to focus on The General Agreement on Tariffs and Trade (GATT). The GATT was the precursor to the World Trade Organisation (WTO). Article 24 is being cited as a universal solution to objections to a No-Deal Brexit. However, this proposition has been debunked multiple times and doesn’t stand scrutiny[1].

[1] https://fullfact.org/europe/gatt-nine-lives-article-24-again/

In recent weeks, talk of international companies planning relocate their operations to other parts of Europe[1] has not phased the populist proponents of Brexit. Thus, it’s vital for businesses to plan for a No-Deal Brexit where only temporary provisions will exist between the UK and EU. However, reports show that the UK is still not prepared for a No-Deal Brexit in October.

For aircraft design and maintenance and pilots and cabin crew, there may be no sustained mutual recognition between the EU and the UK for aviation licences, approvals and certificates. In addition, the UK will no longer benefit from EU Bilateral Aviation Safety Agreements (BASAs).

Mounting concerns are being voiced about the prospect of a No-Deal Brexit and the subsequent impact on aviation and the traveling public. To date, Conservative and Labour Party leaders would rather sweep such concerns under the carpet.

The online help from the UK Government, the European Commission (EC) and on the CAA and EASA Brexit microsites remain the best available information.

[1] https://www.chathamhouse.org/expert/comment/japanese-warning-over-fallout-hard-brexit-not-idle-threat

Aviation & Brexit 87

It’s reported that this year’s Paris Air Show was worth £ 8 billion to the UK economy. More than 70 companies were exhibiting at this global marketplace for the aviation industry. Today, the UK’s place as a world leader in aerospace design and manufacturing is built on regulatory alignment, integrated supply chains and top-class research and innovation. All three of these are severely challenged by the Brexit project.

Sadly, the leading candidate to be the next UK Prime Minister seems to have turned a blind eye to the facts. This week he’s quoted as saying that the impact of leaving the European Union (EU) without a deal would be “very, very small”[1]. For those accustomed to evidence-based policy making this glib political assurance is playing well with a narrow party electorate but is very far from true.

The interdependencies within aerospace design and manufacturing businesses across the whole of Europe didn’t arise overnight. Since the 1960s, there’s been one direction set towards more and more working together. This approach has delivered success on the world stage. One leg of this success stands on is the high level of confidence in each other’s institutions, regulatory cooperation and the harmonisation of rules.

Meanwhile, Conservative (and Labour) politicians have played to prejudices by telling their constituents of “faceless Brussels bureaucrats.” Whilst the truth is that there are a great number of civil servants in the UK and Brussels who are exemplary in their work.

The success of European aerospace design and manufacturing gets taken for granted. The strength of cooperation, collaboration and coordination is swept under the carpet. In cahoots, the national media then tends to highlight the stories politicians feed them about discord, mistakes and rivalry.

Since the general populace has had little need for knowledge of how the system works, just that it’s safe, then an unhealthy situation of glib and unsustainable predictions persists. This goes some way to explaining why a candidate for UK PM can get away with saying the impact of leaving the European Union (EU) without a deal would be “very, very small”.

Usually a political campaign has a phase where a candidate needs to create credibility and legitimacy for their campaign so people will take them seriously. This stage is being bypassed in the UK.

[1] https://uk.reuters.com/article/uk-britain-eu-leader-johnson/johnson-says-impact-of-no-deal-brexit-would-be-very-very-small-idUKKCN1TW29S

Aviation & Brexit 86

A new Conservative Party leader should be named on Tuesday, 23 July and then appointed UK Prime Minister (PM) one day later. That’s only if the Government’s majority in the UK Parliament hasn’t crumbled. Then the House of Commons (HoC) summer recess begins one day after[1]. The HoC returns on Tuesday, 3 September just before the political Party conference season gets started. So, the idea that there’s time to apply Article 50 and negotiate a new deal with the European Union (EU) before the 31 October exit day is pure fantasy. If there was unity, harmony and a convergence of positions then a small chance exists. None of those three words can reasonably be used to describe the situation.

A lot of political talk still centres around the World Trade Organisation (WTO) and peculiar notions that it might be easier to get a deal with over 160 Countries than it is to deal with 27 Countries. The WTO framework doesn’t cover key aspects of the UK economy, like: Aviation, Medicine, Export Licencing and Digital Data. Often expressed as a sign of more “Unicorns”, frustration continues to grow amongst those who have gained a smattering of knowledge after 3-years of this merry-go-around. As a result of all the nonsense spoken, there’s little doubt that Brexit is damaging the UK’s reputation as a good place to do business.

If Boris Johnson enters Number 10, Downing Street as PM then he could discard his firm promise to leave the EU, come what may on 31 October only then to see his Government fall. Thus, the strong likelihood of a “No Deal” outcome with no implementation/transition period is looming. Without a formal withdrawal agreement there’s only the temporary contingency measures that both the EU and UK[2] have published so far. I’ve written about this in my Blog 61, 71 and 74.

One area of significance is how this event will impact aerospace Design Organisations (DO) who are primarily based in the UK. Approvals issued by the European Aviation Safety Agency (EASA) to a UK DO, before the exit date will remain valid for 9 months from the day after the 31 October. To provide continuity, UK DO’s are being encouraged to apply to the UK Civil Aviation Authority (CAA)[3] for a national approval in advance of the exit day. One small silver lining is that the UK CAA will not charge an up-front fee for issuing these approvals, provided the scope is the same as the EASA approval and no technical investigation is required. After that a fee is changed for surveillance of the DO approval under a published scheme of charges.

This is one subject area amongst a large number, across many industries. Yes, Brexit is a magnificent way to create extra bureaucracy and we will all end up paying for it in the long run.

[1] https://www.parliament.uk/about/faqs/house-of-commons-faqs/business-faq-page/recess-dates/

[2] https://www.gov.uk/guidance/prepare-to-work-and-operate-in-the-european-aviation-sector-after-brexit

[3] https://info.caa.co.uk/eu-exit/aerospace-design-organisations/