UK and EU must 'wake up' to risk of grounded flights after Brexit, airline body warns – CNBC

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A body representing 50 airlines has written to the European Commission warning that it must take urgent action to prevent the grounding of flights after the U.K. leaves the European Union.

“We get the sense from the politicians and officials that on the morning of March 30, the aviation industry will wake up and go to work as usual, even if there is a hard Brexit,” Andrew Kelly, president of the European Regions Airlines Association (ERA), said in a press release on Tuesday.

“It won’t, it can’t, and the U.K. and EU need to wake up to that fact now, before it’s too late.” The U.K. is due to depart the EU on March 29.

The letter to officials in Brussels claimed that a “no-deal” Brexit could have “disastrous consequences,” impacting routes, aviation safety and border security. The ERA has estimated that 1.8 million routes across Europe will be affected in the event of a no-deal Brexit.

The ERA has asked EU lawmakers to immediately agree a reciprocal agreement that keeps traffic rights in place for carriers operating between European Union member states and the U.K.

Downing Street has said it wants to explore the possibility that British-owned airlines could remain a member of the European Aviation Safety Agency (EASA).

But the ERA has said that that even if such a deal were struck, there remains confusion about EU ownership rules that could prevent airlines from operating.

Under present rules, the European Union limits non-EU ownership of airlines of its member states to 49 percent. After March 29, British shareholders will no longer count towards the EU ownership of IAG, the parent company of British Airways and Spain’s Iberia, potentially breaking those rules.

In another example, U.S. carrier Delta Air Lines owns 49 percent of the equity of the U.K.’s Virgin Atlantic. In July 2017, Richard Branson agreed to sell 31 percent to Air France-KLM, while 20 percent remained with the Virgin Group. It is not yet clear how this ownership structure could be affected.

In September, Michael O’Leary, the CEO of Irish budget airline Ryanair said a hard Brexit could lead to flights being grounded for weeks and its likelihood was being underestimated.

Rival carrier Easyjet has been more confident on Brexit, arguing it would be unthinkable for flights to be halted. Despite that confidence, the airline has taken steps to mitigate disruption, shifting the registrations of more than 100 aircraft to a newly-created airline based in Vienna and switching pilot licenses to German and Austrian permits.

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