The Brexit Deal and Air Transport

Brexit would present the air transport industry of the UK with some opportunity vis a vis the market outside the EU

by Dr Ruwantissa Abeyratne

In every century, almost as if dictated by natural law, a country emerges with the power, the will and the intellectual and moral persuasion to shape the entire international system in accordance with its own values ~ Henry Kissinger

( November 26, 2018, Nassau, Sri Lanka Guardian )  Over the weekend, British Prime Minister Theresa May and leaders of European Union countries agreed on and approved an agreement on the withdrawal of the United Kingdom and future relations between the UK and the European Union. Both parties hailed the agreement as “the best and only deal”.

The deal brings to bear several interesting issues for air transport both in the UK and in the EU. The carriers of the United Kingdom presently operate within the single European transport market or “Single European Sky” in accordance with the provisions of EU Regulation 1008/2008. The objective of this Regulation is to establish a “community carrier” status for all carriers that have their nationality in members of EU and apply a homogeneous application of Community legislation to EU carriers at Community level. Air traffic rights for all European carriers, including, at present the UK carriers, come within the purview of the European Commission which negotiates with countries outside Europe on a “non-discrimination basis”. This will no longer be the case after Brexit formally takes place. UK carriers will have to negotiate separate air services agreements with 44 European countries to serve the intra European market, not to mention separate agreements with countries outside Europe.

The UK will have to revert to the status quo ante existing prior to the UK joining the EU. It is reported that the EU is the single largest air transport market for the UK carriers, involving 49% of passenger traffic and 54% of scheduled carriage of UK carriers being within the EU . These figures could change with Brexit where the UK would have to negotiate separate bilateral air services agreements with the rest of the EU member States. It follows that under the new circumstances, unless they were granted within the Brexit negotiations which they were not), the UK carriers would lose their inherent right to market access on an intra-Europe basis between cities within the same EU Member State (e.g. Paris/Nice) or between two cities in two different EU member States (e.g. Lisbon/Rome).

With regard to the exercise of air traffic rights within the EU, their exercise is essentially and exclusively subject to published Community, national, regional and local operational rules relating to safety, security, the protection of the environment and the allocation of slots and that a Member State, after consultation with interested parties including the air carriers and airports concerned, may regulate, without discrimination among destinations inside the Community or on grounds of nationality or identity of air carriers, the distribution of air traffic between airports in accordance with certain conditions.

These conditions vary from the airports serving the same city or conurbation; the airports being served by adequate transport infrastructure providing, to the extent possible, a direct connection making it possible to arrive at the airport within 90 minutes including, where necessary, on a cross-border basis; the airports being linked to one another and to the city or conurbation they serve by frequent, reliable and efficient public transport services; and the airports offering necessary services to air carriers, and do not unduly prejudice their commercial opportunities. Any decision to regulate the distribution of air traffic between the airports concerned would be taken subject to the principles of proportionality and transparency and would be based on objective criteria.

Additionally, licensing (excluding operating licences of airlines which have been the jurisdiction of individual States) and procedural issues of the UK would have to conform to EU standards if the UK carriers were to fly into European Countries and the European Aviation Safety Agency (EASA) will cease to have jurisdiction over UK safety issues which would mean that UK safety standards would also have to comply with EU Standards and vice versa. There are also several other provisions in the regulation on air operator certificates and their issuance; pricing; registration and leasing that apply commonly to EU carriers, which the UK will be rid of. It will have to adopt its own regulations and schedules n these issues.

The UK will be able to control its borders and immigration, with full sovereignty over its airspace – the airspace over its territorial landmass and adjacent territorial waters – and it will not be subject to the pervasive decisions of the European Court of Justice on aviation and all other legal issues; the UK will adopt its own laws and regulations; and small businesses in the UK will not have to pander to the oft stringent requirements coming from Brussels which effectively preclude them for developing their businesses.

One of the main corollaries to this historic measure is expansion of the British infrastructure to prepare for what the British hope would be a greater Britain. For example, expanding Heathrow - the nation’s hub airport - is considered to be the most critical infrastructure project to secure the long-term prosperity of Britain’s economy.

Another significant line of control for the UK carriers that exists until the coming into force of Brexit is the US-EU Open Skies Agreement which would no longer apply to such carriers when the UK separates from the EU. The Open Skies Agreement allows European carriers to fly without restrictions from any point in the EU to any point in the US and vice versa. Consequently, the Agreement saw the emergence of much closer alliance agreements between airlines of both the US and the EU, facilitating competition, particularly between hub carriers. It also forges additional investment and market access opportunities, as well as strengthening the framework of cooperation in regulatory areas such as safety, security and, in particular, the environment, where both sides have agreed on a dedicated Joint Statement on the Environment. These conditions would no longer apply to UK carriers once Brexit is formally given effect.

Yet another important aspect of the separation is that numerous European Union regulations which apply commonly to all European carriers will cease to apply to the British carriers. Some examples are Regulation 261/2004 on compensation to passengers for delay and denied boarding; 889/2002 on compensation for aircraft accidents; 1107/2006 on rights of disabled person in air transport; 2111/2005 on a common list of community carriers; and 1546/2006 on common basic standards on aviation security, just to name a few.

Brexit would present the air transport industry of the UK with some opportunity vis a vis the market outside the EU. Aviation authorities in the UK could well capitalize on emerging markets by forging bilateral air services agreements advantageous to the UK with other States without being shackled by restrictive EU laws and rules which bound the UK as an EU member.

The only snag appears to be that the agreement has to be acceptable to the UK Parliament when it is discussed on 12 December just before the Christmas break. No one would say this is par for the course. And there is no talk of a plan B if the agreement is rejected by the House of Commons.

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