Thursday 13 July 2017

THE IMPACT OF BREXIT ON AIRLINES

The boss of Ryanair Michael O'Leary told the European parliament this week that when we leave the EU we will also exit the Open Skies agreement and we will no longer be able to fly to the EU and British airlines will be unable to fly between European airports (HERE). There is no WTO agreement to fall back on and we therefore need to negotiate a new or interim agreement before March 2019.

Mr O'Leary does not think there is goodwill towards us in the EU and they will not necessarily give us an agreement or at least one that is in place in time. Because airlines schedule flights a year in advance we need to have an agreement settled by next March. Willy Walsh of British Airways thinks we will be able to sign a new agreement because it would be "relatively straightforward" and maybe he's right. But I don't see why the EU should help British operators like Easyjet and Jet2. Ryanair have headquarters in Dublin I think and BA merged with the Spanish airline Iberia some years ago but the EU may still require these airlines to be headquartered inside the EU.

Whatever the outcome it is just one more headache for the government to manage and more uncertainty for British businesses.