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-   -   Speculation: Brexit Effect on AA-BA??? (https://www.flyertalk.com/forum/american-airlines-aadvantage/1774222-speculation-brexit-effect-aa-ba.html)

mrow Jun 26, 2016 1:03 am


Originally Posted by ChrL (Post 26831581)
How about customs? I can't remember how it is laid out in Heathrow but don't a lot of airports in the UK have three separate channels: red, green and blue where blue = EU arrivals (as indicated by a colored stripe on the bag tag).

Heathrow has this at the moment. Once Brexit happens (assuming it does) the blue channel will simply disappear, leaving only the red and green channels.

I guess any bag tags issued in the UK will also lose the green edging on them which signals EU departure point.

Fanjet Jun 26, 2016 1:39 am


Originally Posted by JDiver (Post 26831337)
1. The 52-48% was advisory; it is not binding.

2. Article 50 must be implemented. It hasn't been, and Cameron, who steps down in the Fall, has said he won't sign.

David Cameron has already sad that he accepts the will of the majority. The reason why he himself won't invoke Article 50 of the EU Charter is because he is resigning, and he believes the incoming PM should be the one directing this Brexit.


3. Parliament hasn't acted.
We are barely 48 hours out from this referendum. And the voter count has yet to be certified. Moreover, there were plenty of MPs who supported Brexit.


4. The 2.5 million signature petition to re-vote must be considered by Parliament.
You mean the online petition which just asks for one's name, a postal code, and an e-mail address? I'm sure that Parliament will give it serious consideration. :p

BA and AA will be fine. The UK is not part of Schengen. And the main impact of the UK being in the EU with regards to LHR (and all other UK airports) is that the UK has to abide by the EU's Open Skies agreement. But even if a non-EU UK decided to abandon the EU Open Skies agreement (and I doubt they would as it could hinder their access to airports in the EU), that would probably actually benefit BA and AA even more against the competition.

bhomburg Jun 26, 2016 4:13 am

AA will no longer be required to pay compensation for its flights leaving LHR/the UK - assuming the UK will not adopt EC261 as national law post-leaving the EU, which may or may not happen.
Also, with no UK-specific legislation replacing EC261, BA as a future non-EU carrier will not be liable under EC261 for all its flights leaving the US.

kauppias Jun 26, 2016 8:29 am


Originally Posted by bhomburg (Post 26832088)
AA will no longer be required to pay compensation for its flights leaving LHR/the UK - assuming the UK will not adopt EC261 as national law post-leaving the EU, which may or may not happen.
Also, with no UK-specific legislation replacing EC261, BA as a future non-EU carrier will not be liable under EC261 for all its flights leaving the US.

That will certainly give them a competitive edge, but will also make booking connections out of UK better for customers :)

Will be intresting to see if the UK ends up copying the eu261 protections of leaving them out completely!

JonNYC Jun 26, 2016 8:56 am


Originally Posted by bhomburg (Post 26832088)
AA will no longer be required to pay compensation for its flights leaving LHR/the UK - assuming the UK will not adopt EC261 as national law post-leaving the EU, which may or may not happen.
Also, with no UK-specific legislation replacing EC261, BA as a future non-EU carrier will not be liable under EC261 for all its flights leaving the US.

Nice one!

SeattleDavid Jun 26, 2016 10:42 am


Originally Posted by bhomburg (Post 26832088)
AA will no longer be required to pay compensation for its flights leaving LHR/the UK - assuming the UK will not adopt EC261 as national law post-leaving the EU, which may or may not happen.
Also, with no UK-specific legislation replacing EC261, BA as a future non-EU carrier will not be liable under EC261 for all its flights leaving the US.

All of these kinds of comments fail to appreciate that the EU and its regulations are an extraordinarily complex beast - what matters most to BA / AA / IB is the European Common Aviation Area, not the EU. While the UK is in the EU it is automatically a member of the ECAA - part of the key negotiations before Brexit would be whether the UK can become a non-EU member of the ECAA (like about ten other countries - Norway, Switzerland, Bosnia & Herzegovina, for example).

In order for the UK to be in the ECAA it will need to follow all (most?) EU aviation policy and regulations - but the Brexit camp want to be free of those regulations.

Thus, neither Brexit (as a referendum vote) nor the triggering of Article 50 will make BA a non-EU airline as bhomberg (and others) suggest. What happens to BA (and Easyjet, Virgin Atlantic, etc etc) will depend upon what is agreed in the up to two years of negotiations that happen after the triggering of Article 50. Since no-one has stepped to trigger that or to engage in those negotiations - there is going to be a very, very long period of uncertainty.

Calchas Jun 26, 2016 2:20 pm


Originally Posted by ChrL (Post 26831581)
How about customs? I can't remember how it is laid out in Heathrow but don't a lot of airports in the UK have three separate channels: red, green and blue where blue = EU arrivals (as indicated by a colored stripe on the bag tag).

Customs is irrelevant for international transit pax.

U.K. doesn't really worry about the green/blue channel stuff anyway. If they suspect you are violating customs regulations, you don't need to find HMRC, HMRC will find you ;)

Jacobin777 Jun 26, 2016 3:23 pm


Originally Posted by SeattleDavid (Post 26833193)
there is going to be a very, very long period of uncertainty.

That might be one of the reasons why BA (IAG Group) and EasyJet stocks were down substantially on Friday.

Calchas Jun 27, 2016 3:55 am


Originally Posted by Jacobin777 (Post 26834429)
That might be one of the reasons why BA (IAG Group) and EasyJet stocks were down substantially on Friday.

Forget about Friday, how about this morning??

http://i.imgur.com/wWETfHhl.jpg

IAG also down another 9%

mvoight Jun 27, 2016 4:00 am

This might actually result in a cost savings for BA..
After the exit they would no longer have to pay the EU passenger benefits for late or canceled flights, except on flights from EU countries (Not to EU, just like AA)

Calchas Jun 27, 2016 4:12 am


Originally Posted by mvoight (Post 26836103)
This might actually result in a cost savings for BA..
After the exit they would no longer have to pay the EU passenger benefits for late or canceled flights, except on flights from EU countries (Not to EU, just like AA)

EU compensation is a negligible part of BA's cost base

Without access to the single European aviation area IAG may be forced to fracture back into separate companies, because EU airlines cannot be majority owned or controlled by non-EU citizens, and the degree of cooperation between non-EU and EU-headquartered airlines in their common ownership structure with combined operations may breach that requirement. That would undoubtedly affect the AA-BA/EC/IB partnership. [EC would probably be transferred to IB ownership.]

Meanwhile the UK no longer has air operating treaties with any EU state, so until these are arranged, if the UK left the single aviation area, it would be illegal for BA to operate air services to these countries from the UK.

Of course this will eventually be solved, but no one knows what the solution will look like.

The degree of uncertainty of the legality of future air operations between the UK and the EU states is what is driving investors out of aviation at the moment.

cosmo74 Jun 27, 2016 4:45 am


Originally Posted by bhomburg (Post 26832088)
AA will no longer be required to pay compensation for its flights leaving LHR/the UK - assuming the UK will not adopt EC261 as national law post-leaving the EU, which may or may not happen.
Also, with no UK-specific legislation replacing EC261, BA as a future non-EU carrier will not be liable under EC261 for all its flights leaving the US.

Whilst that might be nice for BA and AA, it's bad news for passengers - EC261 was designed to incentivise airlines to treat their passengers better and work harder to ensure their flights ran to time. At the minute, the airlines will do everything they can to ensure a flight doesn't get delayed into compensation paying territory (although obviously some times it still will) - do you think the same will happen when there's no financial penalty? Same with overbooking and downgrades - what does it matter if they sell extra seats in order to ensure a full plane - tough luck really if you end up getting downgraded, it won't cost the airlines anything in compensation any more.

rapidex Jun 27, 2016 5:46 am


Originally Posted by Calchas (Post 26836128)
EU compensation is a negligible part of BA's cost base

Without access to the single European aviation area IAG may be forced to fracture back into separate companies, because EU airlines cannot be majority owned or controlled by non-EU citizens, and the degree of cooperation between non-EU and EU-headquartered airlines in their common ownership structure with combined operations may breach that requirement. That would undoubtedly affect the AA-BA/EC/IB partnership. [EC would probably be transferred to IB ownership.]

Meanwhile the UK no longer has air operating treaties with any EU state, so until these are arranged, if the UK left the single aviation area, it would be illegal for BA to operate air services to these countries from the UK.

Of course this will eventually be solved, but no one knows what the solution will look like.

The degree of uncertainty of the legality of future air operations between the UK and the EU states is what is driving investors out of aviation at the moment.

Nobody has yet mentioned Norwegians operations from the UK to the US.Norway will be looking to have them protected.

Outside the open skies agreement the UK could offer all sorts of 5th freedom rights to the ME3,and sell them slots at exorbitant prices.Maybe even enough to pay for expansion at LHR,assuming Boris doesn't take over.

Calchas Jun 27, 2016 5:53 am


Originally Posted by rapidex (Post 26836363)
Nobody has yet mentioned Norwegians operations from the UK to the US.Norway will be looking to have them protected.

They will be in a very long queue, if the UK doesn't enter the common aviation area. But frankly I think the airlines will push very strongly for the UK to remain in the existing aviation system. The cost of EU/261 really is a rounding error on the spreadsheet compared to the cost of separating their UK and intra-EU operations, not to mention negotiating a separate open sky agreement with the US.

ashill Jun 27, 2016 7:13 am


Originally Posted by rapidex (Post 26836363)
Nobody has yet mentioned Norwegians operations from the UK to the US.Norway will be looking to have them protected.

This is exactly the issue with being outside the EU. Norway and Switzerland have many/most of the benefits and burdens of being EU members (including being part of the European Common Aviation Area) but, as non-EU members, relatively little influence on those policies.

Norwegian Air Shuttle and Ryanair are the two non-UK airlines with the most to lose if the UK doesn't wind up in the ECAA, I think, but AA is probably the non-European (the continent, not any political region) airline with the most to lose.

It's really a disaster for AA/BA if the UK doesn't enter the ECAA. My understanding is that BA, being a subsidiary of a Spanish company, will lose the right to operate any non-EU flights out of the UK (assuming that the UK and EU at least negotiate bilatertal 3rd and 4th freedom rights), unless IAG spins BA off into a UK company. And if UK doesn't enter the ECAA, AA and BA will lose the right to be in a joint venture. Either way, it's at best a totally unpredictable mess with uncertainty likely to persist for years unless and until the various parties work out a mess of bilateral treaties to replicate what is already in place due to the ECAA.

Clearly, assuming Brexit happens, the best case scenario for AA/BA is that the UK enters the ECAA, in which case it's essentially business as usual, if I understand correctly: BA retains the right to operate in the UK as a subsidiary of IAG, the joint venture is unaffected, and BA remains effectively an EU airline subject to all the EU rules, including the delay compensation rules. But as a non-EU member, the UK would have influence only as a significant-but-still-relatively-small partner.


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