Published on January 5th, 2018 | by Mark Dwyer0
European Commission warns Airlines about Brexit Implications
In a notice to operators in mid-December, the European Commission Directorate-General for Mobility and Transport warned that all Union primary and secondary law will cease to apply to the United Kingdom from 30th March 2019 and the United Kingdom will become a Third Country. (A third country is a country not member of the EU). The aviation sector is highly integrated and harmonised at Union level. The current market access and freedoms enjoyed by aviation stakeholders have been granted under Union law, including notably free and unlimited access to intra-EU air traffic.
In order to obtain and keep an EU operating licence and benefit from the intra-EU air traffic rights, air carriers must comply at all times with the conditions under Article 4 of Regulation (EC) No 1008/2008 on air services. The conditions include, among others, the need to have one’s principal place of business within an EU Member State, and to be majority owned and effectively controlled by EU Member States and/or nationals of EU Member States. If the conditions are no longer fulfilled as a consequence of the UK becoming a third country, the operating licence will no longer be valid. EasyJet is planning to establish a new European airline, easyjet Europe, headquartered in Vienna to enable it to continue to operate flights within the EU after Brexit. In contrast, a Ryanair subsidiary, Ryanair UK, applied to the UK CAA for an AOC on 21st December in the event it may be required after a hard Brexit. Ryanair currently operate three UK domestic routes – London Stansted to Belfast Aldergrove / Edinburgh / Glasgow.
As the situation currently stands, at the withdrawal date, the operating licences granted to airlines by the UK CAA will no longer be valid EU operating licences. Air carriers of the UK will no longer enjoy traffic rights under any air transport agreement to which the Union is a party, be it to or from the territory of the UK, be it to or from the territory of any of the EU Member States. They will no longer have access to designation/traffic rights available under the bilateral air transport agreements between EU Member States and a third country on account of the principle of EU designation accepted by the third country concerned.
The UK’s intention is to remain within EASA which governs certification and licensing. Although the EU regulations establishing EASA will cease to apply on Brexit, it will be in the interests of all parties for the UK to continue to participate in EASA. Air freedoms are by way of international agreement and are therefore outside the scope of EASA. Even if the UK remained within EASA, operating restrictions into and out of the UK could be put in place.
According to a position paper published in September by the European Regional Airlines Association (in which many UK companies are members), the ERAA believes it is essential a wide-reaching agreement on aviation is reached between the EU and UK at least twelve months before the deadline for negotiation ends in March 2019 (i.e. in two months!).
“As a minimum, we would recommend that the agreement should include the following:
- An EU–UK bilateral agreement comprehensively guided by and in the spirit of EU Regulation 1008/2008. This would allow minimum disruption to services currently operating within the European region to and from the UK.
- In the bilateral agreement, particular attention should be given to protecting the following principles included in EU Regulation 1008/2008:
- Article 4 (a); (b); (f) – The conditions for granting an operating license
- Article 6 (1) – The requirements to obtain an air operator certificate
- Article 13 (1) – The provisions on leasing
- Article 15 (1) – The provisions on intra-Community air services
- Continued application of EASA regulatory standards to UK operators and undertakings to support common safety compliance and a competitive, harmonised supply chain (for aircraft parts and materials) across the wider European region.”
The risks posed to regional aviation should an agreement not be reached forthwith are significant for the wider European market. These include:
- Negative impact on demand, competitiveness, pricing, choice, consumer protection and connectivity.
- All traffic rights between the EU and UK would lapse leaving uncertainty for businesses, consumers and aviation on the future of air services between the EU and the UK.
- If there is no legal foundation established to underpin traffic rights by the EU and the UK by March 2018, European flight operations will face paralysis. This would have deleterious effects for many European Regions Airline Association members; particularly should there be trade-off for one freedom over another. Disrupted networks will negatively affect the region’s society and its ability to connect both within Europe and globally. Strategic vulnerability will plague the European network until such time an agreement is reached.
Realistically, the UK and the EU have less than 12 months to solve this problem in order to allow airlines to plan with certainty their schedules beyond March 2019. Let’s hope for some progress on this matter soon.