Tag: Brexit

Where are we?

It’s astonishing how Twitter is being used.  Tweets range from banal stupidly, viscous abuse and tiresome copycat phrases to matters of international diplomacy and important public information.

Here’s a copy of the Tweets that were posted by the European Union’s Michel Barnier @MichelBarnier on 8 March 2019.

“I briefed EU27 Ambassadors and EP today on the ongoing talks with #UK. Following the EU-UK statement of 20 Feb, the EU has proposed to the UK a legally binding interpretation of the #Brexit Withdrawal Agreement. Most importantly:

2/5 The arbitration panel can already, under Article 178 WA, give UK the right to a proportionate suspension of its obligations under the backstop, as a last resort, if EU breaches its best endeavours/good faith obligations to negotiate alternative solutions

3/5 EU ready to give legal force to all commitments from January letter of @eucopresident and @JunckerEU through joint interpretative statement. (link: https://europa.eu/!Kj44wR) This will render best endeavour/good faith obligations even more actionable by an arbitration panel.

4/5 EU commits to give UK the option to exit the Single Customs Territory unilaterally, while the other elements of the backstop must be maintained to avoid a hard border. UK will not be forced into customs union against its will.

5/5 The EU will continue working intensively over the coming days to ensure that the UK leaves the EU with an agreement.”

I read nothing unreasonable in the public statement above.  If this is insufficient for those MPs in the UK who wish to leave the EU, then it’s unlikely that anything will satisfy them at all.  It’s pushing the interpretation of the Withdrawal Agreement (WA), on the table to the limit.

Northern Ireland (NI) will be treated differently whatever happens – Deal or No-Deal or Art. 50 extension or No-Brexit.  Today, it’s a part of the UK that is treated differently for sounds historic reasons.

I’m sure there are incoherent xenophobes who will still shout like mad about a perceived unfairness.  I’m sure Brexit supporting UK politicians will seek to misinterpret the above in the hope of blaming the EU for their folly.  And I’m sure that far from this being the end of something this could be just the beginning of a decade of squabbling.  The paralysis of Brexit uncertainly is concern about the worst-case outcome, namely a No-Deal.  Those UK polticians saying we should jump straight to that worst case outcome to end uncertainty and end damage to the Brexit myth is laughable, illogical and extream foolishness.  Next week in Westminster will be full of loud voices many of which should not be given the time of day.

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/

Brexit & Aviation 69

Brexit has entered a surreal phase.  The days pass by, now there’s only 26[1] left and circular stories circulate like a perpetual merry-go-around.   Let’s remind ourselves that UK law, as it’s currently written means the UK’s exit from the European Union (EU) on a fixed date regardless of any provisions made for that event.  When you think about it the legislation is truly ridiculous but that is how MPs in the UK House of Commons voted.

The facts are that the Brexit that the public were sold in June 2016 isn’t available.  It doesn’t exist.  MPs who are describing a Brexit “No-Deal” outcome as short-term risks are being irresponsible.  They are like the criminals who in a storm lure ships onto the rocks in order to plunder[2].  Wrecking a Country’s economy and standing in the world is well underway but there’s still time to stop it.

Aerospace design and manufacturing will be hit severely by this ruining poltical behaviour.  Today, the European Aviation Safety Agency (EASA) is responsible for the issuance of civil aircarft Type Certificates and organisation approvals in the EU Member States.  After its withdrawal, the UK will resume these tasks under its obligations as “State of Design” under the Chicago Convention on International Civil Aviation.  That may sound fine, in of itself.  However, at the formation of EASA the UK was encouraging its technical experts to leave the UK and join the new Agency in Cologne in Germany.  That move was successful and as a result the national expertise on the certification of design and manufacturing was run down.

Detailed regulations cover the issue of aviation safety certificates for aeronautical products, parts and appliances.  These are complex, changing and subject to international agreements.   The expertise necessary to be a leading country in aerospace design and manufacturing is not easily acquired.   So how will the UK meet its obligations as a “State of Design”?  The best guess is that it will “cut and paste” the exiting European rules, regulations and their implementation as best it can.  When technical changes happen it will follow those changes.

Will the UK train up a new generation of national technical experts?  Much of that will depend on the funding made available to do so and any ambitions for the future.  In the past, the fees and charges, paid by industry were used to fund the activities of the technical experts.  That route may not be open post-Brexit since industry will strongly object to paying twice for the same service.

Even if new technical departments are created this is not a light bulb that can be switched on in a moment.  To put new bilateral agreements in place, aviation partners will need proof that new technical departments are capable, competent and properly resourced.  All of the above typically take many years not months or days.  Hence my view that Brexit has entered a surreal phase.  The reality and the fiction are widely different.  A delay is highly likely and eminently wise given the impass and the ever revolving poltical merry go around.

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

[2] https://en.m.wikipedia.org/wiki/Wrecking_(shipwreck)

 

Brexit & Aviation 68

Steve Bell is an acquired taste.  His cartoons are topical but sharp political satire.   I framed a cartoon of his years ago.  It cruelly depicted the endless march of Liberal Democracy.  The way I remember it was seeing lots of important characters striding purposefully on a staircase that looked like a Möbius strip.   Going round and around.  The cutting point being that lots of energy and industrious activity was going nowhere.

This week has been just like that cartoon depiction but for Conservatives and Labour Party’s.  Walk outs, important meetings, speeches and a flurry of activity but there has been little real progress towards a practical Brexit endgame.  Who would go into a room negotiating and beat yourself up in front of the party across the table?

Now, opening on March 14th is the chance that the UK House of Commons could send UK Prime Minister May back to the EU to request an extension to the Article 50 process.   Even so, it’s not clear what that extra time would be used for even if it was agreed by the EU Member States.

The European Parliament (EP) has 4 plenary sessions when it can ratify the UK Withdrawal Agreement before European elections in late May this year.  If this is not approved at one of those EP sessions, it’s unlikely to be voted on until after the Summer.  An Article 50 extension beyond the end of June 2019 suggest that the UK should take part in European Parliament elections[1].  A mix of interrelated events will always make this last-minute change complex but not impossible.

Extra time would seem to be wise given where we are at this moment.  The latest UK Government publication on the implications for business and trade of a No-Deal exit on 29 March 2019, makes stark reading.  It’s written as a summary document and so detail is missing but the message is one of lack of preparedness (no mention of aviation).  With the votes in the UK Parliament delayed there’s little notice for businesses, employees, investors and communities on what may be the biggest economic and trading change they face in a lifetime.

In aviation, people are moving their approvals and licences to other States.   For example, UK licenced engineers are looking to transfer their UK licences to an EASA Member State.  Not everyone will need to do this and there’s no doubt that a UK license will remain of value around the world.

In addition, some provisions are being made to soften the extremes of an abrupt UK withdrawal, but the effects of a No Deal Brexit will be penalising[2][3].  A so-called World Trade Organisation (WTO) No-Deal Brexit doesn’t exist for civil aviation.

[1] European Parliament elections will begin on 23 May and end on 26 May 2019.

[2] https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/aviation-safety-after-brexit

[3] https://www.adsgroup.org.uk/blog/eu-aviation-safety-regulation-for-a-no-deal-brexit/?ref=upflow.co

 

Any objectivity anymore?

There are UK politicians running around the broadcast studios.  Those advocating a “No Deal” outcome to the current Brexit negotiations are using all their skills to polish gravel in the hope of turning it into diamonds.  Debate has been debased to a frightening degree.

In my career, I spent quite some time in the analysis business.  That’s the world of gathering data and crunching it with the aim of trying to figure out what going on in the “real” world.  This process is essential if the aim is to continually improve something.  Just to over simplify, as is the fashion of the moment, analysis can be broken down into two approaches.

One approach is to collect wide-ranging data and explore it, as best you can and try to distil the story that it’s trying to tell.  It’s to illuminate and discover what is contained within data.  This unbiased objective approach can be more difficult than one might imagine.  It’s the scientific method.  It’s open to peer review and open debate.

The other approach is to start with a set of beliefs or theories.  Bit like an imaginary pulp fiction police detective with a hunch.  Then to dig into the data to see if your preconceived idea can be proven or not.  If not keep quiet or in the extreme case, choose the methods and data that ensures your case is proven.

It’s this second case that seems to be most often applied to Brexit.  Anyone who scrutinises Brexit in an open and objective way is often labelled a saboteur, traitor or mutineer.  The quality of the critical debate we are having is screwed by inflammatory name-calling and blind religious devotion to beliefs and theories.

It’s not unusual for people who take the first approach to find it hard going.  It takes considerable skills of persuasion to demonstrate that an unpopular result is true.  Business books are full of references to a performance-based approach.  Because of the phenomena I’ve described above I’d recommend that a politician or CEO’s reward is never solely based on a measure of “performance”.

Parliament has shown repeatedly that UK politicians are brilliant at deciding to run down rabbit holes.  Wouldn’t it be so much better if a degree of thoughtful objectivity could shine through once or twice.   If a “No Deal” Brexit outcome happens then objectivity has gone out of the window.

Brexit & Aviation 67

I must confess that the detail of aviation environmental policy is not my area of expertise.  Nevertheless, it’s a substantial subject and one of immense importance.  It’s best to note that environmental policy advances at international, regional and national level.  To be truly effective the framework for environmental policy must be adopted within the International Civil Aviation Organisation (ICAO).

This year is an important year for ICAO.   It’s an Assembly year.  Every 3-years an Assembly[1] comprised of all Member States of ICAO meets in Montreal.  During the first 75 years of its existence, ICAO has made an indisputable contribution to the development of worldwide civil aviation.  However, at previous Assemblies, ICAO has had immense problems reaching a consensus on environmental issues.

In the European Union (EU) its agency, the European Aviation Safety Agency (EASA) actively contributes to the ICAO Committee on Aviation Environmental Protection (CAEP) which develops and maintains the international standards for aircraft noise and emissions[2].

With Brexit looming, it remains to be seen what, if any role the UK will have in the future in the development and maintenance of environmental standards for aviation.  That said, there’s more to aviation environmental policy than technical standards.  There’s a useful European Aviation Environmental Report[3] that explains the various mechanisms that are being worked on with respect to aviation environmental policy.

One of the most controversial, for obvious reasons is that of market-based measures[4].  Market-based measures are mechanisms designed to tackle the climate impact of aviation, beyond what operational and technical measures or sustainable aviation fuels can achieve.

In October 2016, the 39th Assembly of ICAO States reconfirmed the objective of stabilising CO2 emissions from international aviation at 2020 levels.  From November 2018, 76 ICAO States volunteered to offset their aviation emissions from 2021 and this represents three quarters of the international aviation activity.

In Europe, the approach has been to adopt an Emissions Trading System (ETS).   ETS and offsetting schemes both address aviation emissions but differ in how they work.  Currently, only flights between airports located in the European Economic Area are included in the EU ETS legislation.  For the UK, the implication being that, post-Brexit it will no longer be covered by such EU legislation.

The UK Government is proposing statutory instruments, or secondary legislation on ETS before the exit date of 29 March 2019.   In the event of a disorderly (“No Deal”) exit from the EU, the UK would not have an agreement in place to continue participating in the EU ETS.  The UK would therefore leave the EU ETS on exit day[5].   The UK’s future approach to carbon pricing is to consider a range of options, including continuing to participate in the EU ETS, a UK ETS (linked or standalone) or a carbon tax.  If the far-right UK Conservative European Research Group (ERG) further get their hands on power there may be no measures on climate change at all.

This lack of clarity and direction are not helpful for aviation operators who need to plan.  With all the time that has passed since the vote it’s sad that all we know is the date of exit and even that is in question.

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

[2] https://www.easa.europa.eu/sites/default/files/dfu/Opinion%20No%2009-2017.pdf

[3] https://www.easa.europa.eu/eaer/

[4] https://www.easa.europa.eu/eaer/topics/market-based-measures

[5] https://assets.publishing.service.gov.uk/media/5c0febf1ed915d0bd3e4da92/081118_MRV_Explanatory_Memorandum_FINAL.pdf

 

Brexit & Aviation 66

The simple phrase to “kick the can down the road” has been in use in political language for a long time.  It means to put-off work on an important issue for a later date.  When faced with an apparently insurmountable problem it’s just one of the tactics that can be used.  Often the hope is that the passage of time will yield new solutions or change the environment sufficiently for an existing solution to become viable.  Guess what?  The longer the clock runs the more dangerous this short-term tactic becomes.  If there’s a deadline looming for the delivery of a project or a hard and fast legal barrier sitting – immovable, then this is when the situation gets tense and the risks of complete failure escalate.

35 days on the clock.  There’s now an expectation that Prime Minister May will ask for a 3-month extension to the Art 50 timings.  This is an optimistic scenario but it’s the only practical way that legislation can be passed should a vote in Parliament given the Government a green light to proceed.

Brexit could be called off.  The complete failure that the No Deal outcome represents will blow a massive hole in the political landscape of the UK Parliament and the whole Country.  Will the PM take that risk?  It’s difficult to tell.  But it’s easy to tell that the UK is not prepared for an almighty crash out of the European Union (EU).

This week in aviation we have a reminder of the power and strength of European cooperation.  After a farewell tour, the Tornado aircraft is set to retire from Royal Air Force (RAF)[1] at the end of March.  The aircraft was built as part of a consortium between the UK (BAE Systems), Germany (MBB) and Italy (Aeritalia).  The Panavia Tornado was designed and produced by the industries of 3 European Countries, in one of the biggest, most challenging and successful multi-national aircraft programmes ever run.

It’s part of my history too.  I remember working on cockpit equipment for the Tornado ECR (Electronic Combat and Reconnaissance) aircraft.  That was in the 1980s.  It was my first experience of working on a multi-national programme.  Equipment designed in the UK was produced in Germany as part of the close working arrangement between two companies[2][3].  Today, both of those companies are American owned but continue to operate at the same sites.

There is no doubt that we are stronger together in Europe when we work together.  Brexit is a devastating blow to the successful history of European cooperation.   It’s no-good saying that this is not an issue for the EU.  That is to totally ignore the reality of the closer ties that are being forged in the EU.  The European Defence Agency (EDA)[4] supports its Member States in improving their defence capabilities through European cooperation.  That will grow in strength.

[1] @RoyalAirForce

[2] Collins Aerospace. Located in Heidelberg key capabilities: avionics for fighters and trainers; ground vehicle electronics; and space products.

[3] GE Aviation Systems (formerly Smiths Aerospace), Cheltenham.

[4] https://www.eda.europa.eu/

 

Aviation & Brexit 65

5 weeks and a few days to the end date that was put into legislation for the UK to leave the European Union (EU).  Both Saint David’s and Saint Patrick’s Day fall before the scheduled exit day.  There’s still a small chance that the departure could be called off but, just now, the bookmakers are increasing the odds in favour of a tragic “No Deal” outcome to Brexit.

In every respect negotiation between the 27 EU Member States have gone well.  What’s not going well is when they sit across the table facing the UK.  It’s not at all clear what the UK Government’s policy is this week.  Voices off from Ministers point in several directions at the same time.  On Tuesday, the UK’s Business Secretary[1] told manufacturing leaders that leaving the EU without an agreement would be a “disaster” for the UK and said he recognised the need for clarity “as soon as possible”.   Vagueness at such a late hour doesn’t look good from any direction[2].

Maintaining a position as a world player in the aerospace industry requires substantial investments in research.  During its membership, the UK has been a prominent beneficiary of the EU’s Horizon 2020 programme.  Now, the EU is planning its biggest research and innovation funding programme ever, with a budget of €97.6 billion.  This will be called Horizon Europe.  It will run from 2021-2027.

Trying to match the efforts of the UK’s neighbours might be the ambition of some UK politicians but their current performance doesn’t offer much hope.  Funds will no doubt be tight after any post-Brexit downturn.

The aviation ties between neighbours are the most important.  Over 75% of all UK holidaymakers and 66% of business travellers go to the EU each year.  63% of all tourists and 73% of all business travellers visiting the UK come from EU Member States[3].  Putting barriers in the way of this movement of people just makes both communities poorer.

[1] https://www.politicshome.com/news/uk/foreign-affairs/brexit/news/101966/greg-clark-says-business-no-deal-fears-are-‘project

[2] https://twitter.com/CBItweets/status/1097903644970672131?s=20

[3] https://www.ig.com/uk/news-and-trade-ideas/shares-news/how-will-brexit-impact-airlines-and-the-wider-aviation-industry–180316#information-banner-dismiss

 

Brexit & Aviation 64

It may not be the first casualty but the news about flyBMI is disconcerting.  Continuing uncertainty is going to cause businesses living on the margins to fail.  In that way it’s undoubtably Brexit that is the root causes of the failure.

The East Midlands-based airline that employed over 350 people, said in a statement: “The airline has faced several difficulties, including recent spikes in fuel and carbon costs, the latter arising from the EU’s recent decision to exclude UK airlines from full participation in the Emissions Trading Scheme.”

Given the condition of several smaller regional airlines it’s likely that more could fail.

The ERA (European Regions Airline Association) is a trade association representing the aviation industry.  ERA calls for a wide-reaching reciprocal aviation agreement between the EU and the UK to prevent serious harm to European connectivity[1].

UK Government’s is planning for an alternative in the event of a No-Deal scenario.  There’s no doubt that such an outcome would be devastating to this sector.

Not so long ago, British charter carrier Monarch Airlines left tens of thousands of passengers stranded.  It will be a turbulent year ahead for European airlines.

39 days remain and the path ahead is as misted in fog as it has been for the last two years.  Those who promote a No Deal outcome are inviting more bankruptcy filings.

[1] https://cloud.3dissue.net/9237/9242/9271/11995/?page=10

Brexit & Aviation 63

43 days left until Brexit, if it happens[1].  As the UK Parliament continues to vacillate so the European Parliament (EP) has decided.  Yesterday, in Strasbourg the EP voted through a regulation on Brexit and aviation safety.   The European Union (EU) will continue to recognise aviation safety approvals in the UK for at least an interim period in the event of No Deal outcome to Brexit[2].

The withdrawal of the UK from the EU without an agreement affects the validity of certificates and licenses originating from the UK.   A regulation proposed in December last[3], has now been debated in the EP.  Amendment were adopted by the EP on 13 February 2019 on the proposal for a regulation of the EP and of the Council on certain aspects of aviation safety with regard to the withdrawal of the UK from the EU[4].

These measures give UK based aerospace companies a short time to adapt to a new situation.  It gives some grandfather rights to approvals granted before Brexit day.

There will be decisions to be made by companies.  To go for a national approval hoping that a set of bilateral deals will be sorted out in the fullness of time.  To go for a European approval as a “third country” or by move business to an EU Member State.  Or, in fact combinations of these possibilities.

Dither in the UK.  Speedy implementation in the EU.  Draw whatever conclusion you like.

[1] https://howmanydaystill.com/its/brexit-6

[2] https://www.adsgroup.org.uk/blog/eu-aviation-safety-regulation-for-a-no-deal-brexit/

[3] http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0894/COM_COM(2018)0894_EN.pdf

[4] http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2019-0107