Hard Brexit threat to UK airlines

Hard Brexit threat to UK airlines

UK airlines face the threat of severe restrictions on European flights immediately after a “hard” Brexit, the European Commission has reportedly warned.

Commission officials recently told British airline representatives that under a transitional deal after a hard Brexit, UK carriers would be able to operate only direct flights between the UK and the EU, the Financial Times disclosed, citing two people familiar with the discussions.

Under such restrictions, airlines such as easyJet and BMI Regional, which currently fly between destinations in the continental EU, such as Milan to Munich, would not be able to operate such routes without changing their status.

Ryanair could be prevented from operating intra-UK flights should Britain also impose the same restrictions on EU airlines.

The probability of a hard Brexit has risen since prime minister Theresa May made clear her plans to leave the EU’s single market and end the authority of the European Court of Justice over British courts.

One doubt is whether the UK will accept European aviation law, over which the ECJ has the ultimate say.

EasyJet has said since last year’s referendum that it intends to set up a new EU-based company with a European air operators’ certificate to handle intra-EU flights.

The carrier has said it expects the process to cost £10 million over two years.

But the commission’s warning highlights the changes facing the aviation industry as the government triggers the Article 50 divorce clause of the EU Treaty.

The moves easyJet has embarked on would involve establishing its new company on the continent as its principal entity, with a UK subsidiary to run intra-UK flights.

BMI Regional, which also operates intra-mainland flights, could also be prevented from flying such routes from the day of Brexit.

A spokesperson said the group would wait until the end of 2017 before deciding if it would follow easyJet in setting up a hub on the continent to maintain access to intra-European flights.

The airlines would also both also have to register some of their fleet as UK and others as EU aircraft.

Ryanair is registered as an Irish airline, so would not be directly affected by the commission’s rules on UK carriers.

But the UK government is likely to mirror any restrictions placed on to its own airlines by preventing EU carriers from operating intra-UK flights.

A Ryanair spokesman said: “Until the final outcome is known, we will continue to adapt to changing circumstances in the best interest of our customers, people and shareholders.”

The carrier has previously hinted that is ready to scrap its intra-UK routes rather than establish a new UK-based subsidiary to comply with new regulations.

International Airlines Group, parent company of British Airways, will not be affected by the restrictions, as all BA flights currently leave from or arrive in the UK.

But the company must still satisfy regulators that it is majority-EU owned after Brexit, despite having a large number of UK shareholders and being 20% owned by Qatar Airways.

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