Brexit – Page 12 – John Vincent

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/

Aviation & Brexit 85

The year’s longest day is almost with us. This week, for the first time in a while, The UK’s Brexit is not a major topic at a European Union (EU) summit[1]. Now, the new European Parliament (EP) is in place there’s much discussion about the big jobs that need filling. In the EU, a new team of European Commissioners is appointed every 5-years. Appointing the President and the College of Commissioners is one of the issues concentrating minds in Brussels and across Europe.

Today’s European Commissioners will be leave office on 31 October 2019. Coincidentally, that’s the date the UK is supposed to be leaving the EU. It’s impossible to say if that will happen, not even with the remaining candidates for UK Prime Minister saying; that they still wish to leave. The words of Donald Tusk, warning the UK to stop wasting time still echo around the room.

It’s worth noting that the Romanian Presidency of the Council of the EU will be replaced by the Finland’s Presidency[2] at the end of the month. This is interesting given that Finland held parliamentary elections in April this year. The new Government of Finland was appointed on 6 June. So, there’s not much time to prepare an agenda for their term but I feel certain Climate Change will be high on the list of issues.

Potentially, that means a lot more talk about EU policies that promote sustainable and “smart” mobility. In one direction, exhibited at the Paris Air Show are a horde of new electric propulsion systems for aircraft. In another direction, policies include the introduction of an aviation tax at EU level and a carbon floor price[3]. No doubt this subject is going to be highly controversial. The call for Net Zero emissions by 2050 is a major strategic shift for Europe.

Today, not all EU Countries have a flight tax, like the UK. It’s a tax on a ticket. Unfortunately, that ticket tax is not used to mitigate the environmental impacts of flying. Aviation taxes, such as fuel taxes or ticket taxes, do have an impact on the economy. If there’s not strong coordination and cooperation in the design of an aviation tax at EU level, then the danger of exporting jobs is real in what’s an international business.

Some studies do suggest that an aviation tax is not effective in reducing CO2 emissions. However, there’s a great deal to be debated and investigated on this key subject. I cannot believe the UK will not have a strong interest in the direction that the EU chooses to take on aviation taxes. Naturally, it would be better if the UK was part of the decision-making process but leaving the EU with “No-Deal” rules that out completely.

[1] https://www.consilium.europa.eu/en/meetings/european-council/2019/06/20-21/

[2] https://eu2019.fi/en/frontpage

[3] https://www.aviatax2019.nl/#home

Aviation & Brexit 84

Of all the political cartoons now on display, one of the best shows a British red bus at the bottom of a ravine[1]. Having sailed off the top, and into a deep gorge it’s resting, all crumpled at the bottom. Out of a front window is a speech bubble with the words: “I think we need to change the driver”. That nicely sums up the UK’s predicament. No attempt to recover the bus’s situation as the obsession is to find a new driver. Thus, I struggle to know what to write. Or at least, what to write that is not part of the echo chamber centred on who is be the next UK Prime Minister. However, the message is clear; very few of the intractable problems they we face have changed in the last 3-months. By the way, there are an enormous number of uncomplimentary Brexit cartoons that feature big red buses.

It was a year ago the UK Government published some slides called the: ‘Framework for the future UK-EU partnership[2]‘ for transport. I must take it that these slides remain applicable. That means the UK wishes to continue to explore possible terms for participation in the European Aviation Safety Agency (EASA).

I have just come back from attending the 2019 EASA – FAA International Aviation Safety Conference in Cologne, Germany. More than 350 participants from all over the globe converged on Cologne for the 3-day event. I think there was about 40 Countries represented. The Countries of Europe, and the rest of the world, have a permanent common interest in civil aviation safety. Recent events have focused minds on that ever-present challenge as yearly passenger numbers reach 4.6 billon[3].

In the time that EASA has been around, that’s 15-years, the number of scheduled passengers handled by the global airline industry has increased in all but one year. That’s enough to concentrate anyone’s mind about safety but it also raises many questions about the environment and aviation security.

What I’m going to say now is entirely predicable and consistent with everything I’ve written so far. Working together in this region of the globe makes huge sense. No one Country is going to sort out safety, security and environmental challenges by themselves. In fact, if we can’t make good progress here in Europe it would seem doubtful that we could make progress in any world region.

At the start of what’s a new session for the European Parliament, I hope that enough politicians are motivated to burst out of the negative impasse that trouble us all. There’s a leadership role for Europe. It only needs the will to take it.

“Good planets are hard to come by. Please think of our environment before you print this Blog.”

[1] https://www.cairnstoon.com/

[2] https://www.caa.co.uk/Our-work/About-us/EU-exit/

[3] https://www.statista.com/statistics/564717/airline-industry-passenger-traffic-globally/

Aviation & Brexit 83

This week there’s been a strong message in the news. It’s been about the lessons of history, the value of cooperation and the vital role played by international institutions in keeping the peace that we enjoy. That’s no less true in civil aviation as it is in many other walks of life.

Until the 1940s aircraft operation, design and manufacturing activities were mostly conducted at a national level. With the advances in technology brought about in World War II and anticipating a post-war growth in civil aviation far sighted Governments set-up what is the now the International Civil Aviation Organisation (ICAO). This organisation formulates basic standards and practices that can applied by its Member States across the globe.

Back in my Blog; Brexit 67, I mentioned that this year is an important year for ICAO. It’s an Assembly year[1]. Every 3-years an Assembly comprised of the Member States of ICAO meet at its HQ in Montreal, Canada. During the first 75 years of its existence, ICAO has made an indisputable contribution to the development of worldwide civil aviation. This is quite an achievement given the need to get agreement with its 193 Member States and many international organisations.

During the ICAO Assembly sessions, a work programme in the technical, economic, legal and technical cooperation fields is reviewed in detail. Within ICAO, the European Union (EU) its agency, the European Aviation Safety Agency (EASA)[2] are major contributors to its work. The role and recognition of regional organisations is growing. Its accepted that solutions need to be tailored to fit the local circumstances in global regions.

In respect of Brexit, whatever happens to the UK, as an ICAO Member State it will need to continue to apply international Standards and Recommended Practices (SARPs). Today, civil aviation is regulated at European level. To make that work the aviation safety regulations agreed at European level comply with the ICAO SARPs. However, it’s an hierarchical construction so much of the detail needed is in what is often called “soft law” and can be changed independently of the ICAO SARPs.

Even in this Brexit extension period uncertainty remains as to what you may need to do to continue working and operating in the aviation industry if, or after the UK leaves the EU on 31 October 2019. The UK’s lack of clarity and direction are not helpful for anyone in who wishes to plan. It will be interesting to see if the UK makes a meaningful contribution to the ICAO Assembly this year, as it has done in the past.

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

[2] EASA is responsible for the issuance of type certificates and organisation approvals in the EU. After its withdrawal, the UK will resume these tasks under its obligations as ‘State of Design’ under the Chicago Convention on International Civil Aviation.

Aviation & Brexit 82

So, what happened on Sunday when the #EUelections2019 result became public? Professor Sir John Curtice[1] sums it up for me: “Far from providing a clear verdict, the result simply underlined how difficult it is likely to be to find any outcome to the Brexit process that satisfies a clear majority of voters.” Yes, last week most British voters backed political parties that support staying in the European Union (EU) but that’s not enough to bring the whole process to a conclusion. Now, as Brexit, and the disruption of Brexit get caught in an infinite loop, we must remember that the rest of the world continues to advance with every other matter of interest. For example, the competitiveness of the aviation industry depends upon having common agreed rules. Developing and implementing those rules is the way we build the future.

Big on my aviation news last week was the adoption of legislation on Drones in Europe[2]. One of outputs in the European Commission’s Aviation Strategy for Europe is the technical requirements for Drones. These new rules apply to both professionals and those flying Drones for leisure in the EU Member States[3]. By 2020, Drone operators will need to be registered with national authorities. That will be simple for mass-produced Drones and proportionally more detailed for larger Drones.

Currently, the UK Civil Aviation Authority (CAA) is running a consultation on a proposed charge for a new drone registration scheme that it is intended will become UK law at the end of November 2019. The EU rules will replace existing national rules in EU Member States, but in a “No-Deal” post-Brexit UK the national rules will continue to be applicable. I expect these rules to, for the most part, remain similar in their aims and objectives but there’s no doubt they are set in a different context and use different legal language. Next, the European Commission and the European Aviation Safety Agency (EASA) will publish further guidelines. It will be thought-provoking if those operating guidelines are not adopted by the UK.

In fact, the UK will be under pressure to adopt the rules on Drones. Mainly because any Drone operators that has their principal place of business, are established, or reside in a Third Country, will need to apply the EU Regulations if they wish to operate within the Single European Sky airspace.

The US FAA is serious about the business of Drones. A major conference is coming up and the aganda includes EASA. This is a postive message for US- EU cooperation. The successful certification and implementation of what’s being called “urban air mobility” is going to need a great deal of international working.

Key to operating safely and making a commercial success of a business using Drones will be having products and processes that can operate in a wide spectrum of environments and interoperate with others. Innovators across Europe will be looking use Drones for more and more applications as the technology develops. In time complex drone operations with a high degree of automation may become as day-to-day as mobile phones are to our lives. Now, the EU has achieved this initial aviation milestone where we go next is up to the imagination.

[1] https://en.m.wikipedia.org/wiki/John_Curtice

[2] European Commission adopted EU rules (Implementing Act Drones & Annex to Implementing Act Drones) to ensure increasing Drone traffic across Europe is safe and secure for people on the ground and in the air.

[3] https://ec.europa.eu/info/law/better-regulation/initiatives/2018drones_en

Aviation & Brexit 81

It’s about a month ago since I last wrote. This has been a busy month. European Parliamentary elections took place on Thursday in the UK. The results of those elections will not be known until late on Sunday. A long process of local and regional counting will take up most of Sunday. What it will mean in the UK is still unclear but at least these were real votes in real ballot boxes. The outcome of which should be a sound indication of the current public mood.

The UK is now in the position where if it ratifies the existing EU-UK Withdrawal Agreement (WA) before 31 October 2019, an EU withdrawal will take place on the first day of the month following the completion of the ratification procedures. However, there are no signs that national ratification is on the cards. The UK’s two largest political parties have given-up on negotiations to come to a compromise on Brexit. This should be no surprise since a deal between the Conservatives and Labour would still have to pass the through a grid-locked House of Commons (HoC). A compromise involving the UK staying in a Customs Union (CU) is more than the hard core Brexit supporting Conservatives can accept. Now, as if the above wasn’t enough, the UK’s Prime Minister is stepping down. A starting gun has been fired on a that leadership race and it’s unlikely to be helpful to any potential political compromise.

The Brexit stasis continues to have a pressing and disruptive impact on the aviation and travel industries. Recently, the travel firm Thomas Cook reported a £1.5bn loss for the first half of the year[1]. Behind this were several factors but one of the bigger ones was potential customers putting off their summer holiday plans.

With Brexit delayed until later this year, the UK is exporting people. Now record numbers are applying for Irish passports[2] and that may give a boost to aviation in Ireland. As an indicator, I’ve had a conversation with a person prepared to relocate his businesses if Brexit remains unresolved.

In the technical regulation arena, the objective would seem to be to maintain as much continuity as possible[3]. Our international rules-based system assumes that Countries will work together to improve conductivity. But the situation remains fluid between the UK and EU, and there are still big questions to answer before we reach 1 November 2019.

The power-play going on between US and China is not a good background in which to continue with the uncertainty of Brexit. The UK should be defending multilateralism in this situation. A choice needs to be made since the UK’s aviation future need not shift from an influential rule-maker into a rule-taker. In this region, retaining membership of EU Agencies, like EASA remains a viable option.

Brexit is now in a go / no-go position. I’m more of the opinion that the project must be terminated and quickly. Even if it is not, close alignment with the EU still has major benefits. Is there the political vision in the UK to steer Brexit to a conclusion? It’s going to be well into July 2019 before we even have a hint as to the answer to that question. 3-years since the UK referendum and its only uncertainty that is certain.

[1] https://www.bbc.co.uk/news/business-48292318

[2] https://www.irishpost.com/news/how-to-get-irish-passport-166453

[3] https://ebace.aero/2019/news/latest-news/ebace2019-session-looks-at-impending-brexit/

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