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Travel industry news

05 Feb 2019

BY James Chapple

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TRFBLI

Airlines set deadline for ownership restructure in event of no-deal Brexit

British airlines could have just seven months to overhaul their ownership structures to retain full EU flying rights in the event of a no-deal Brexit.

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Airlines set deadline for ownership restructure in event of no-deal Brexit

The Financial Times reports the seven-month deadline features in revisions to draft EU law requiring airlines to be majority-owned by EU nationals.


According to the paper, UK airline groups must present plans to maintain their existing licences within two weeks of the draft law being adopted or face having their operating licence revoked.


“That plan shall set out, in a complete and precise manner, the measures intended to achieve full compliance with the [EU] ownership and control requirements as from the October 27, 2019, at the latest,” the draft legislation states.


A number of UK registered airlines have already taken significant steps to achieve majority EU ownership, such as Ryanair and easyJet, or set up European arms to counteract the effect.


In its full-year financials issued last November, easyJet said 47% of its equity capital – or shareholding – had already been transferred out of the UK.


“EasyJet’s investor relations programme has focused mainly on Europe since 2016 with the intention of increasing this to above 50% prior to the UK’s exit from the EU,” said the airline.

 

It is understood the revision to the draft law is a softening of the EU’s position, there previously being no Brexit adjustment period.


The matter is complicated by whether Britain ends up leaving with or without a deal.


Any deal is expected to contain aviation provisions to ensure flights continue after March 29, 2019, or at least a transition period where the current UK-EU legislative framework in respect of aviation continues as normal.


The EU Commission has previously confirmed it will honour UK pilot and aircraft certifications for nine months following Brexit, giving the CAA time to put in place an alternative system.

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