How Is The Airline Ownership Being Dealt With Ahead Of Brexit?

  • Jan 15, 2019 GMT
  • Team Kalkine
How Is The Airline Ownership Being Dealt With Ahead Of Brexit?

Once Britain will exit EU on 29th March this year, Brussel has asked rest 27 states, which will remain in the EU bloc to explain how airlines they license will abide by the rule on ownership.

The European Union bloc’s rule set out that airline companies must be owned and controlled by EU investors by more than 50 % in order to keep back their ability to fly freely in the EU bloc.

Companies including Iberia and British Airways, owned by IAG – have yet to confirm that they will attain the threshold limit post Brexit, when shareholders belong to UK will no longer count as EU bloc shareholders.

Other carriers like EasyJet and Ryanair have postulates that they will pull out voting rights from non-EU shareholders to comply with threshold limit if need be, meanwhile both the carriers have applied for secondary operating license to allow flight to continue, EasyJet from Austria and Ryanair from UK.

Willie Walsh, CEO, IAG was confident that nothing will dent the airline companies post Brexit.

In October, Walsh told analysts that he firmly believes that both EU bloc and non-EU bloc would come out with an agreement

Currently EU investors hold majority stake in Iberia and therefore, hold a valid operating license to fly in EU post Brexit.

Iberia is a considerable employer in Spain with approximately 7000 workers and carries 19 million passenger every year.

The Spanish government has told Reuters news agency, that they are convinced that Iberia is a Spanish flight but added that they are also quite sure that if required the company will make necessary changes to keep its compliance with the EU.

IAG, a Spanish company with headquarters in the UK, told that they are confident that they will meet EU norms and control rules post Brexit.

As a part of IAG’s strategy to keep back both EU and non-EU (UK) operating rights, the group believes that the airlines are domestically controlled through a series of companies and trusts, rather than being viewed as a part of bigger house, which has majorly non-EU investors.

European Union has told IAG needs to substantiate that the structure is compliant with requirement before Britain leaves the EU bloc on 29th March.

No -deal Brexit imposing risk for UK air carriers

In case of no-deal Brexit, which has become more pronounced in last few days, with May’s government seeking support for her Brexit deal from MPs at Westminster, many challenges are anticipated. This also means that no-deal Brexit on 29th March will have the premise with no structured regulatory framework upon which flights cab operate from UK to EU on 30th March. Britain based air carriers need to take permission from each of EU members separately and vice-a-versa.

Given the scenario, EU is trying to set certain things in place in anticipation of the challenges ahead.

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