Uncertainty Is Certain as the UK Aviation Industry Heads Toward Brexit

Aviation lawyer Hugh O’Donovan offers insight into the potential impact that Britain’s departure from the EU may have on the nation’s airline industry.

As the year draws to a close, British Prime Minister Theresa May has said that the United Kingdom will begin the process of exiting the European Union (EU) at some point in early 2017 when Article 50 of the Lisbon Treaty is invoked. At present, the country’s exit from the bloc is an unknown quantity – as is, of course, Brexit’s eventual impact on the national and regional European aviation industry.

During an e-mail interview earlier this week, barrister Hugh O’Donovan, speaking on behalf of Keystone Law, confirmed to FlyerTalk that the outlook is indeed hazy. The only certain thing, O’Donovan explained, is that once the country formally exits the bloc, the wider British aviation industry will no longer be bound by EU legislation.

As far as catalysts are concerned, he reminds travelers that the crux of Brexit’s impact on aviation doesn’t lie with the triggering of Article 50; rather, the invocation of this mechanism will usher in a two-year period of negotiation. During this time, the UK will set out its relationship with the EU, both in respect to the aviation industry as well as in terms of wider policy matters.

From there, there are multiple possible scenarios, but O’Donovan muses that the UK could return to a situation in which it has access to the European market via a system of bilateral agreements.

However, he adds that “It’s more likely that the UK would go for a single agreement with all the EU and European Economic Area (EEA) states […] but this would require all those states to agree, and some might take the view that for the UK to leave the EU but retain all the market access it currently has […] would not be acceptable.”

But before speculating over the future of air traffic between Britain and the EU, O’Donovan reminds passengers that it’s worth considering the legacy that has informed the industry as it operates today.

O’Donovan explained that, “many do not really remember what the European aviation market looked like before liberalization finally took effect in 1993. For well over 20 years […] most of Europe has constituted one single aviation market, which has expanded…as more states have joined the EU.”

“Before liberalization all such services depended upon agreements between pairs of states negotiated between governments on a bilateral basis,” he reminds passengers.

In the end, O’Donovan states that, “The hope […] has to be that the UK’s withdrawal from the EU generally will not mean the dismantlement or contraction of the European single aviation market.”

Exactly how UK-based carriers will keep their operations moving in the face of Brexit, will, he says, depend on the access negotiated with the EU.

However, O’Donovan adds that “in the event that the UK does not retain or renegotiate full access for its carriers to the single aviation market, some UK carriers may seek to set up airlines within the EU.” This is the course of action that Easyjet is preparing to take, as announced on the BBC earlier this month by CEO Carolyn McCall.

But what could all of this mean for passengers? O’Donovan offers no easy answers.

“We’ll have to wait and see. It may mean UK carriers, which have been in [the] vanguard […] in driving down airfares, will not manage to apply quite the same competitive pressures across the whole of Europe, and fares might go up,” he explains.

But, he adds, that “passengers are also voters, so they are unlikely to encourage their governments to ‘punish’ the UK for Brexit by limiting its access to the single aviation market.”

[Photo: PA]