Treasury Today Country Profiles in association with Citi

EU-UK ‘no deal’ flights threat

Areoplane sitting on the runway

The consequences of a no deal exit from the EU by the UK could throw air travel into chaos. Businesses in particular should plan for the worst and hope for the best.

Brexit will impact the way in which businesses operate on many levels, and that includes how employees use air transport.

According to a document issued by the EC, the consequences for the UK of becoming a third party in the EU aviation sector will be that all EU-law based rights, obligations and benefits cease.

This means no traffic rights, third-country restrictions kick-in for ownership and control rules, and the end of mutual recognition of certificates and approvals.

If the UK leaves the EU without agreement, unless the two sides manage to beat out lots of mutual arrangements to ensure continuity, UK-EU and EU-UK flights could become a lot more troublesome.

Grounded

As part of the internal market for air services, any airline licensed by an EU or European Economic Area (EEA) country can operate any route within the EU/EEA area.

Ceasing to be a part of this automatic agreement on airlines means that unless airlines (both EU and UK) can gain individual permission to operate their routes between the UK and EU then they may, in theory, be grounded.

As part of its EU membership, the UK also has agreements on airline routes with 17 non-EU countries such as the US, Canada, Switzerland and Iceland. The consequences of ‘no deal’ Brexit means these will cease to apply.

“If the UK leaves the EU in March 2019 with no agreement in place, UK and EU licensed airlines would lose the automatic right to operate air services between the UK and the EU without seeking advance permission,” the UK government said.

It added that “replacement arrangements will be in place before exit day”. With the clock ticking, no such acceptance of each other’s terms has been announced.

Airport security checks

In a separate warning from the UK government, some UK passengers may have to face extra security screening in a post-Brexit no deal world.

UK aviation safety standards are compliant with the EU minimum and there are additional measures in place too. The UK government says, “there is no reason for the UK’s aviation security regime not to be recognised by the EU as equivalent”.

However, if the EU chose not to recognise the UK’s standards, although most passengers will not notice the difference, passengers travelling from the UK who transfer to another flight at an EU airport would now need to be rescreened, along with their luggage.

In what has so far been a fractious engagement of the two sides, the UK government still states that: “It would not be in the interest of any EU country or the UK to restrict the choice of destinations that could be served. However, it does conclude that “if such permissions are not granted, there could be disruption to some flights”.