International Airlines Group has called on the EU to overhaul its “arcane” airline ownership laws.

IAG chief executive Willie Walsh told the European Parliament on Tuesday he was “confident” the company’s structures would survive Brexit and meet the EU’s strict licensing rules.

He called for the UK and EU to reach a comprehensive air transport agreement that “should also clarify” that UK nationals would count towards the EU ownership requirements, even after Brexit.

Speaking to MEPs, Walsh said the EU “operates under an arcane system regulating the ownership and control of airlines”, and called for the rules to be relaxed, the Financial Times reported.

“Those structures are unnecessary,” he said. “I would prefer to see a situation whereby we don’t have to replicate [them].”

For an airline to operate routes within the EU, it must demonstrate that it is effectively owned and controlled by EU nationals, with at least 50% of its shares held by EU nationals.

This presents a problem for UK airlines after Brexit, when their UK shareholders will no longer be classed as EU shareholders.

Ryanair chief executive Michael O’Leary, an outspoken critic of IAG and its Irish carrier Aer Lingus, claimed the group was “in complete…denial” about the ownership challenge.

“They’re hoping that it’ll go away,” he told the FT. “They’ll have to front up to how catastrophic it is at some point though.

“They don’t know themselves [how to solve it]. But their shareholders will have to sell, and the group has to get broken up.”

Brian Havel, a professor in aviation law at the University of Oxford, also told the FT that IAG “could not exist in its current form” after Brexit.

Walsh has in the past said he has “absolutely no concerns” about the IAG structure, which ensures all three of its carriers are able to maintain their national flying rights in Spain, the UK and Ireland, and has denied that the group will need to be broken up.

A spokesman for IAG said it would “continue to comply with all the relevant ownership and control regulations”.

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