With the EU-UK Trade Agreement in place, many questions have come to light as to how airline ownership and operations will work. Aviation Analyst Alex Martinez Rivera explains:
Finally, the Trade Agreement is complete and the UK leaves the EU Single Market on December 31st. However, in reality, who begged for more, the EU or the UK?
It is a negotiation for the ages. A negotiation that will go into the history books marking the start of a new relationship between the European Union and the United Kingdom. Now the 20 million Euro/Pound question is, who won? Who was on their knees begging? Who lost? We are going to take a look at all this.
EU-UK Airline Ownership and Control Rules
One of the main issues of aviation was the EU-UK Ownership and Control Rules. This is Something that the Airline Consortium International Airlines Group was worried about due to the ownership of British Airways.
However, this matter was satisfactorily solved. Currently, airlines need to be under EU control to operate. According to the draft on the Trade and Cooperation Agreement of the EU-UK says the following:
“The Parties recognize the potential benefits of the continued liberalization of ownership and control of their respective air carriers.
The Parties agree to examine in the Specialised Committee on Air Transport options for the reciprocal liberalization of the ownership and control of their air carriers within 12 months from the entry into force of this Agreement, and thereafter within 12 months of receipt of a request to do so from one of the Parties.
As a result of this examination, the Parties may decide to amend this Title.”EU-UK Trade and Cooperation agreement, top of page 229.
What does it mean?
While UK air carriers can continue to operate, airlines seeking authorization would require being UK-controlled as they will not count as an EU interest (as UK airlines are not EU airlines).
A departure from what was known but not unexpected.
UK Airlines would still have permission to operate as if it is an EU majority-owned, European Economic Area, or Switzerland-owned. This is as long as it is under license and controlled under UK regulatory control.
That is until the Special Committee on Air Transport issues an agreement among member states and the United Kingdom.
Would the EU impose new requirements?
Most likely, the EU would impose a new requirement for UK airlines. My thought is that it could be a special license or something similar. We would have to see what the Special Committee on Transport brings as a solution.
What about the purchase of Air Europa?
Particularly, if you read the article IAG haggles to reassess their purchase of Air Europa for $613 million it means for the moment British Airways can still be part of the Airline Consortium International Airlines Group.
There could be some additional paperwork but nothing the group can’t handle.
What about European flights for UK and EU airlines?
The UK here got the short straw. Even though, cargo flights with UK carriers can use fifth freedom rights (flying France-Madrid-London). For passenger flights only has basic 3rd and 4th-degree freedoms. These are flying from the UK-EU on a UK Airlines (3rd freedom) and from the EU-UK on an EU airline (4th freedom).
Could any party revise the rules?
Indeed, both parties can revise the rules through the Special Committee on Transport within these 12 months of enforcement or within 12 months of any request.
What about Passengers?
Particularly, the EU and UK passengers will have additional work to do before traveling.
The UK-EU Trade Agreement is the divergence from the European Union creating its own rules and economic market. The EU-UK mobility for less than 90 days should be in place as if an American were to visit either the EU or the UK.
However sooner or later somebody will be caught, most likely in sports teams who are traveling as short as in two weeks.
Lawyers will have a field day, and governments will be tested.
If you’re a Briton or a European traveling to each country, call the destination country’s ambassador since this divergence will take a while to understand.
Author Opinion: Short term the UK loses, but long term the EU loses a powerhouse
The trade agreement marks the beginning of a renewed relationship between the EU and the UK. While the EU needs to respect the UK’s will of the people the agreements publishing marks the divergence of the UK from the EU.
While it creates a “separate bubble” it is a separate bubble that resembles a mini European Union. I see many visits to the agreement in the future and many amendments as it is a replica of the European Union with one country being the UK.
The UK losses on the Single Economic Market that is the European Union, I have all the confidence that this will be rectified in future visits. However, in the long term, the European Union loses even more from the United Kingdom as an adviser in US matters, financial services headquarters, and a mighty powerhouse as a member.
From the United States, we tell both Fair Winds and Following Seas. Hopefully, this new renewed partnership brings to both what they are looking for.
What do you think about the airline ownership rules for the EU-UK agreement? You can contact the author below:
Featured Image: London Heathrow (LHR). Captain Jetson.com.