Brexit: IAG may have to buy out British shareholders
Jan 19, 2018, 3:01 pm
#31
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See Article 3 of the Air Transportation Agreement.
Last edited by Calchas; Jan 19, 2018 at 3:08 pm
Jan 19, 2018, 5:09 pm
#32
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They can fly infra EU, but only as part of a service that goes to the US. The same applies for EU airlines within the US.
See Article 3 of the Air Transportation Agreement.
See Article 3 of the Air Transportation Agreement.
For example, EU airlines cannot sell JFK-MIA. US airlines can sell CDG-BCN.
Unless some form of open skies deal is agreed post-Brexit, UK airlines will no longer be able to sell CDG-BCN.
(infra was an autocorrect typo in my post above btw - I meant intra)
Jan 20, 2018, 2:40 pm
#33
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Oh I thought it was a clever way of referring specifically to one level of subdivision below the EU, i.e., the nation state. 
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But in any respect, that strange consequences may arise from Brexit must surely be taken as a given. Tidying up inconsistencies is not going to happen.
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Tidying up inconsistencies is not going to happen.
Mar 5, 2018, 9:50 am
#34
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The Financial Times has got some details of the state of the US-UK treaty negotiations.
At present the Americans are offering only a standard bilateral air service agreement.
It would require that airlines operating UK-US routes have “substantial ownership and effective control” by either UK or US nationals. BA, owned by IAG, a Spanish corporation, presumably would not qualify. VS presently does as Sir Richard owns 51% of it, but he is attempting to sell his stake to Air France-KLM.
The Americans are apparently also reluctant to extend the existing anti-trust immunity provisions, which enable AA and BA to cooperate on pricing and scheduling.
At present the Americans are offering only a standard bilateral air service agreement.
It would require that airlines operating UK-US routes have “substantial ownership and effective control” by either UK or US nationals. BA, owned by IAG, a Spanish corporation, presumably would not qualify. VS presently does as Sir Richard owns 51% of it, but he is attempting to sell his stake to Air France-KLM.
The Americans are apparently also reluctant to extend the existing anti-trust immunity provisions, which enable AA and BA to cooperate on pricing and scheduling.
Mar 5, 2018, 10:08 am
#35
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It would require that airlines operating UK-US routes have “substantial ownership and effective control” by either UK or US nationals. BA, owned by IAG, a Spanish corporation, presumably would not qualify. VS presently does as Sir Richard owns 51% of it, but he is attempting to sell his stake to Air France-KLM.
Mar 5, 2018, 10:48 am
#36
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The threshold for US airlines is 75% ownership by US citizens. Also, the airline has to be majority run by US citizens. Sir Richard ran into this problem with Virgin America.
Mar 5, 2018, 1:30 pm
#37
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The UK is unlikely to close its markets much, as it will need any foreign investment it can get, to try to grow the economy post-Brexit, but I can imagine the EU closing its economic borders somewhat after the UK leaves and a more dirigiste, protectionist ethos starts to come to the fore.
Squaring a more aggressive EU ownership and control requirement with a US-UK bilateral agreement requiring UK control of the UK airline could be very difficult. IAG, of course, could transfer most of the BA assets to Iberia or another EU airline, leaving a transatlantic and UK regional rump of BA left. London Atlantic Airways, anyone?
Last edited by flatlander; Mar 5, 2018 at 1:35 pm
Mar 5, 2018, 1:58 pm
#38
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Or there could be some sort of grandfather rights re ownership so no change is needed.
I could imagine IAG lobbying the EU to basically say "through no fault of our own you are forcing us to divest ourselves of a major part of our company and that is going to cost us a lot of money which is unfair"
I could imagine IAG lobbying the EU to basically say "through no fault of our own you are forcing us to divest ourselves of a major part of our company and that is going to cost us a lot of money which is unfair"
Mar 5, 2018, 2:35 pm
#39
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Mar 5, 2018, 2:44 pm
#40
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Why? IAG has a cake already so what's wrong with them wanting to keep their existing cake?
Grandfather rights are pretty standard things all over the world.
Grandfather rights are pretty standard things all over the world.
Mar 5, 2018, 2:52 pm
#41
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This will be just like the current 25% tariff proposal on steel, it's will screw America more than anyone else and will never happen. I'm sure they'll be a lot of huffing and puffing before early 2019 but when the time comes, they'll push over. Pretty sure AA quite likes the JBV...
Mar 5, 2018, 3:16 pm
#42
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This will be just like the current 25% tariff proposal on steel, it's will screw America more than anyone else and will never happen. I'm sure they'll be a lot of huffing and puffing before early 2019 but when the time comes, they'll push over. Pretty sure AA quite likes the JBV...
So, as in any trade negotiation grandfathering depends on what else the UK is willing to put on the table and whether the other parties (EU, US) get something they are happy with.
I'm constantly amazed that most of the UK press seem to think one side negotiates a trade deal. Quid pro quo etc.
Mar 5, 2018, 4:29 pm
#44
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Or there could be some sort of grandfather rights re ownership so no change is needed.
I could imagine IAG lobbying the EU to basically say "through no fault of our own you are forcing us to divest ourselves of a major part of our company and that is going to cost us a lot of money which is unfair"
I could imagine IAG lobbying the EU to basically say "through no fault of our own you are forcing us to divest ourselves of a major part of our company and that is going to cost us a lot of money which is unfair"
Mar 5, 2018, 11:46 pm
#45
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I think that you are missing the point. The objective is to ensure that VS is UK-controlled, not-US-controlled so as to obtain traffic rights as a UK company.
Again, I am not sure I see the point here: it would not be the EU forcing IAG from divesting themselves of anything but rather the US.
Again, I am not sure I see the point here: it would not be the EU forcing IAG from divesting themselves of anything but rather the US.
Michael O’Leary must be laughing his head off given this is what he’s been saying for the last 2 years while Willie Walsh has been relying on the “it’s inconceivable” line...