Brexit has a great deal of implications especially for the British Airways. The external analysis of British Airways gives a detailed window into the impacts of Brexit. The British Airways is registered under the International Airlines Group which also owns Ireland’s Aer Lingus, Vueling, Spanish carrier Iberia. IAG established services in the year 2011. Though the registered office is in Madrid the operational headquarters are in London.
The real trouble due to ‘no deal Brexit’ starts here as according to the existing rules which state that more than 50 per cent of an airline ownership and control is by EU nationals is mandatory for it to be granted the license to function independently as a European carrier. This figure British Airways may find difficult to meet after a Brexit as its major functioning and market is in Britain. In the event of a no-deal scenario, the passengers from UK could be experiencing flight disruptions and cancellations in accordance to the existing Government norms.
Brussels has warned the owner of the British Airways that its strategy to continue functioning within Europe would not work in a no deal situation. “Airlines concerned should be aware and prepared, and we expect that they have started adopting the necessary measures,” said an EU spokesman. Low cost carriers like Ryanair and EasyJet have announced plans to assure the EU that 51% of their capital and control lies outside UK. “We remain confident flights will continue, even if the outcome of talks is a no-deal Brexit,” an EasyJet spokesperson told Euronews. “We have already put in place our post Brexit structure that ensures EasyJet is able to maintain its network.”
IAG is yet to announce how they plan to prove that atleast 51% of their capital comes from outside Britain. Reports suggest that Company has seeked support from Spanish Govt to continue smooth function in event of no deal Brexit but Willie Walsh, IAG’s chief executive, has strongly refuted any suggestion of the company‘s struggle following a no deal. An IAG spokesperson told The Independent: “We remain confident that a comprehensive air transport agreement between the EU and the UK will be reached. It’s in the UK and EU’s interests to have a fully liberalized aviation agreement.
A body comprising 50 airlines has written to the Europe Commission to take immediate action towards preventing the grounding of flights from UK as this could have calamitous consequences on the aviation security, routes and safety. Approximately 1.8 million routes could be affected.
If there is no agreement by March 30th, 2019, Brussels has given one year truce to continue flying operations between Europe and UK but after that British Airlines would have to align with the rules to hold their licences. Swot & Pestle.com feels that though a no deal Brexit sounds trouble for the British Airways in view of present times. There will be some agreements made, existing norms may be relaxed or changed to allow smooth services of British Airways in Europe. This has also been reiterated by Tim Alderslade, the chief executive for Airlines UK, the trade body for UK registered airlines, when said he felt “confident” that the UK and EU could reach an agreement on aviation.
Mar 24, 2020
Sep 24, 2022
