Aviation

brexit-fact-base-london — Photo by Jag_cz/Shutterstock

Luqa, Malta - Tail fin of an Airbus jet operated by budget airline easylet in front of the tail fin of a British Airways Airbus jet — Luqa, Malta – August 2023
Photo by Ceri Breeze/Shutterstock

Aviation: pre-Brexit

Britain had the largest aviation network in Europe and the third largest in the world. The EU was the single biggest destination market from the UK, accounting for 49% of passengers and 54% of scheduled commercial flights.

The industry contributed £55bn of GVA and employed just under one million people (see Table 8.5). Inevitably, a large part of the industry was exposed to Brexit (see Figure 8.5).

Aviation is an EU success story. Traditionally, bilateral international aviation agreements are very restrictive e.g. specifying individual flight slots for specific airlines. By contrast, as a member of the European Common Aviation Area (ECAA), UK airlines had the right to fly to, from and within European countries.

EU arrangements are comprehensive and flexible. Any British airline could:

fly anywhere in EU;
sell tickets to anyone in the EU;
fly to another member state and within it.

In addition to market access, the UK participated in numerous technical programmes to facilitate the movement of passengers and cargo.

Through the EU, the UK secured deals with key countries across the world e.g. the EU-USA “open skies” agreement in 2008 enables EU or US-based carriers to fly any transatlantic route between the two.

EU airlines adhere to common rules and safety standards. The Single European Sky is an EU initative that sets common rules for the ECAA, which includes 36 countries, including Iceland and Norway. The European Aviation Safety Agency (EASA) deals with the safe operation of civil aviation including air traffic management, and aerodromes. EASA’s standards are recognised worldwide, and it sets regulations for safe flying in Europe. EASA’s approval is necessary for aircraft to fly and for airlines to operate. In 2015, the European Commission delegated greater powers to EASA to define regulation.

EU consumers benefit greatly. Fares across Europe have fallen in real terms, with greater choice and competition and new routes across the EU. Consumers are protected through a common system of Passenger Rights.

Airline passengers can claim compensation for delayed and cancelled flights anywhere in the EU.
Airlines have a duty of care to delayed passengers.
Airlines must meet the needs of disabled passengers and others in need of assistance.

Sources:
Richard Corbett, Brexit briefings, Brexit and aviation, March 2017
IATA, The impact of ‘BREXIT’ on UK Air Transport, June 2016
CBI, Making a success of Brexit – Aviation
Bird & Bird, How will Brexit affect the airline industry from a regulatory perspective?, June 2017

Aviation: expected Brexit impact

Aviation is outside the scope of the WTO and FTAs: it has to be negotiated separately. As a result, bilateral agreements govern the industry, except within the EU, which has its own multilateral system.

Airlines like easyJet have established new and separate operations within the EU27 to ensure that they can continue to operate as an EU airline. This is an example of observable Brexit economic losses from moving activities out of the UK to the EU.

UK-EU aviation
As the government did not negotiate a specific deal with the EU, the UK was out of the European single aviation market at the end of the transition period. This means that there is no legal right to operate flights to in the EU or anywhere else covered by the current EU-level framework.

The UK is no longer be a member of the European Common Aviation Area but does have an agreement with the EU covering safety and market access. As a result:

Airlines would be able to fly between UK and EU but access would be significantly reduced.
UK airlines would not be able to:
- fly between EU countries as they do now;
- operate services on domestic routes within the same EU country.
EU airlines would be able to fly to the UK from any EU member state, but would not be permitted to operate domestic services in the UK.
UK proposed to allow airlines to retain a UK licence if they were controlled by UK or EEA nationals.
EU offered a sixth-month grace period for airlines that wish to keep the rights of an EU airline, but were not already owned and controlled by EU nationals

For consumers, Brexit removes the right of British airline passengers to claim compensation for delayed and cancelled flights under EU legislation. (However, the UK introduced a carbon-copy replacement.)

UK Non-EU aviation
International flights by UK airlines to non-EU countries should not face significant disruption. The UK had been putting in place replacement agreements, notably with the US. The new UK agreements are more limited than EU agreements, but they allow UK airlines to serve non-EU countries.

UK would exit EU systems

The UK would leave EASA and the regulatory and operational system, and would need to set up its own, unless it negotiates otherwise. There would also be significant implications for UK aerospace engineering and manufacturing, not least Airbus. The trade parts of the Brexit deal would be crucial for UK manufacturing.

Brexit was unlikely to have a significant effect on EASA or the current European aviation safety regime:

EU proposed to extend the validity of aviation safety certificates issued by EASA to UK businesses for nine months, indicating that extensions could be granted.
UK CAA said it would recognise EASA certificates, approvals and licences in the UK for up to two years.

The UK could exit the Single European Sky and SESAR (Single European Sky Air Traffic Management Research) programmes, both of which seek to increase safety, efficiency and capacity while reducing delays within European airspace. Britain could lose its place at the negotiating table in shaping future regulation, undermining a sector where it enjoys international leadership.

The UK could seek to remain a member of ECAA, to give access to the Single Aviation Market. However, the UK would have to comply with EU aviation law, with no role in shaping new legislation.
Securing agreement to fly to other EU countries from the UK should not be a problem. But it may be more difficult to secure continued rights for UK airlines to operate between other member states, or within them.
The UK could also seek to retain membership of the EASA. It is possible that only observer status will be on offer with diminished influence. The alternative, of the UK setting up its own separate agency and negotiating equivalency agreements, would be costly, needlessly duplicative and would take considerable time.