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Back in December, the European Commission released a notice informing airlines that, once the United Kingdom leaves the EU, UK carriers will retain none of the traffic rights to which the Union is a party. This was exquisitely glossed over by the British press. Given that the airline that is most likely impacted by this will be Ryanair, one can see why the British aviation industry seems to have taken to heart that famous UK t-shirt slogan of keeping calm and carrying on.
Still, with this is mind, a recent speech by Andrew Haines, in which the CAA Chief Executive outlines a more nuanced and realistic path to navigate Brexit’s impact on aviation, is certainly worth revisiting. He is both keeping calm, and indeed carrying on, but not with some t-shirt level of blind optimism.
On a fundamental level, aviation is an international business with CAA statistics showing that just 16% of UK passengers flew domestically. It should come as no surprise that Brexit will have a significant impact on the industry, regardless of what form and level of flaccidity it takes along the Hard to Soft spectrum.
As Haines made abundantly clear in his speech, European regulations are vital to each sector of the aviation industry. Aircraft certification, for example, is handled on a European level. So are things like pilot licencing, air traffic control coordination and consumer rights.
Currently, UK airlines rely on EU agreed rights in order to fly to and within the continent. As we have discussed previously, if they are not replaced or renegotiated, the situation risks becoming very messy. At best, the UK carriers can fall back on those rights that existed in 1991 and before the creation of the single European aviation market. Given that bookings will soon open for flights after the UK’s withdrawal deadline, this negotiation must be settled soon to avoid undermining consumer confidence. Ironically, Ryanair too is likely to be badly hit, but no-one is accusing Michael O’Leary of t-shirt levels of complacency. He knows that his Irish airline will have no rights to operation to and from the UK to any country other than Ireland. That is why Ryanair is now obtaining a UK operating certificate too.
However, and reassuringly for the UK, Haines explained how pan-European cooperation and coordination is by no means exclusively intrinsically a European Commission thing. In fact, collaboration between national aviation bodies has been ongoing for three generations – long before the European Commission was a glimmer in Jean Monnet’s eye – opening up the potential for development, rather than regression.
But, Haines notes, as do all the UK carriers, that in order to ensure continued cooperation, it is fundamental for the UK to remain part of EASA. Haines argues the case for this from a CAA perspective, claiming that leaving the agency would, at best, require wasted hours spent replicating the vast majority of European regulation. The worst case scenario clearly does not bare thinking about, as Haines claims that the CAA have “consciously decided” not to plan for an independent UK safety system. That is demonstrably the correct decision, but does cross several of the UK PM’s ‘Red Lines’. It will be a non-voting role, risking seeing the UK as a ‘vassal’ of EASA; it will come with a continuing obligation to contribute financially; and it will remain subject to the European Court of Justice. The more dogmatic Brexiteers are not known for putting sensible decision making ahead of ideology (see: Brexit, what is the sense of) so this is no done deal.
Regardless of whether the UK remains part of EASA, Westminster, alongside the CCA, will have a job ahead of them, reconstructing aviation regulations and laws. Still, every cloud has a silver lining. Haines argues that this provides a rare opportunity to increase competition in the industry, keeping fares low and stimulating the UK market. You can almost hear the Brexiteers’ cheers from where you are sitting.
Haines notes that the barriers to increased competition must be broken down, something the Commission has struggled to do. To be fair to the Commission, they are entrenched and difficult to adapt. Still, in the red, white and blue version of Brexit, the UK would be starting with a comparatively blank slate. Like the British bulldogs they think they are, the animal spirits of Brexit can attack afresh these barriers and with Britannia once again ruling the waves, and (more importantly) waiving the rules, anything is possible. Huzzah!
Removing these barriers would allow sectors that are in need of modernisation, such as Air Traffic Management to flourish. Haines is not alone in arguing this of course. In a recent edition of the Aviation Intelligence Reporter, we covered the advantageous impact that market liberalisation, with special regards to TANS, could have on the ATM industry. We wish him luck.
Haines continues that another advantage of the UK restructuring process is that it provides an opportunity to review existing and out-dated regulation, which have proved harder to tackle in the Commission context. His example was slot allocation, another subject on which Aviation Advocacy has been vocal on over the past few years. In the case of slots, the airline v airport and Commission v Parliament stalemates have prevented fundamental reforms to the allocation system. Historical slot ownership is vastly detrimental to competition, and wildly out-dated in the current economic, and political, climate. A clean slate for the UK, free of influence from the EC, might, might enable reform, but expect industrial strength pushback from the legacy airlines to this. More luck called for.
In contrast to his glass-half-full message of reform opportunities, Haines’ final recommendation is to ring-fence EU protections both with regards to the environment and to passenger rights. There has been a lot of debate recently over the extent to which EC261/2004 (the regulation regarding passenger compensation) is proportional, when compared to the equivalent, and less extreme, regulations for train and ship travel. This is normally the sort of yoke Brexiteers like to argue the UK can magically skip clear of as they skip off towards the sunny uplands of post-Brexit bliss.
Clearly, in the face of the negativity regarding Brexit, there are a number of benefits that may emerge from it. However, in order for any of this to happen, all the parties involved must be willing to co-operate. Perhaps they need a form for that cooperation. What about forming some kind of economic and political union? Seems like a rather good idea.
