Brexit and Aviation

Posted on 14 January 2021

One of the major concerns about a "no-deal" Brexit was the potential for serious harm to the aviation industry and to the availability of passenger and freight services. Since aviation is largely not addressed by the WTO General Agreement on Trade in Services (GATS) there was little in the way of a "fall back positon".

The Trade and Cooperation Agreement (TCA) agreed between the UK and EU and now in force does address a number of the critical issues that were facing the industry.

Freedom to fly?

The TCA has ensured that EU and UK carriers will continue to have the right to fly between the UK and EU, on a point-to-point basis. UK carriers will not be entitled to fly (passenger or cargo) between EU airports and likewise EU carriers will be prohibited from flying between two UK airports.

The TCA does permit the UK to agree with one or more EU member states for the right to fly to an EU airport and then onto non-EU airport – but for trade only.

The TCA also requires both the UK and EU to ensure there is no discrimination in the provision of ground handling services, allocation of slots and the taxation of aircraft fuel.

How about Code Sharing?

Airlines may continue to enter into code-sharing agreements, but each airline must have the right to actually perform the relevant service. Customers should be told which airline is operating which part of the overall service. Code sharing arrangement may be subject to the approval of the relevant aviation authorities of the airlines concerned.

Who can own a UK or an EU airline

The TCA sets out very clear rules on this topic.

A UK air carrier must be owned and controlled by UK nationals, must have its principal place of business in the UK, be licensed under UK law and hold an air operator’s certificate issued by the CAA.

Likewise, an EU air carrier must be owned and controlled by nationals of EU or EEA member states, Switzerland (or a combination of these), with its principal place of business in the EU, it must hold an EU compliant operating licence and have an air operator’s certificate issued by EASA or an aviation authority of an EU member state.

Some flexibility arises from grandfathering provisions which allow UK air carriers with a valid EU operating licence as at 31 December 2020 and which are owned and controlled by EU nationals (whether alone or in combination with UK nationals) to be regarded as EU carriers. There is no equivalent provision for EU air carriers.

Discussions on liberalisation these rules will be tabled to the Committee on Air Transport (established under the TCA).

Will there be Regulatory recognition?

As expected, the UK has not agreed to be a member of the European Aviation Safety Agency (EASA). However, the TCA does state that certificates of airworthiness, licences and certificates of competency issued by the EU or UK and which are valid and in force will continue to be recognised by the other party for the purposes of conducting air services in each other's territory. The TCA also allows for cooperation on aviation safety issues such as airworthiness, operation, air traffic management and personnel training and licensing. The Specialised Committee on Air Transport is tasked with drafting the relevant annexes to set out the scope of the cooperation in each area. The first Annex agreed deals with Airworthiness and Environmental Certification.

Has consumer protection been maintained?

The UK has agreed in the TCA to continue to ensure consumer protection measures apply including compensation for denied boarding, cancellation and delays. Appropriate amendments to the Civil Aviation (Denied Boarding, Compensation and Assistance) Regulations 2005 have been made.

Conclusion

The effect of the TCA is to ensure that by and large airlines will not face regulatory impediments to continuing to serve UK-EU routes which have carried millions of passengers every year in recent times. Further collaboration appears likely as the Specialised Committee established under the TCA progresses its work. As it turns out the impact of COVID-19 has done far more damage to the industry than Brexit, but hopefully business will return to usual in time.

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