While nothing is likely to change in the short term for air transport between the UK and the rest of Europe, a new legislative framework will be necessary if the UK is to continue to enjoy a strong presence in continental Europe and maintain its leading position. For the month of June 2016, the UK flag accounted for 51.6% of the number of seats offered between the UK and the rest of the European Union, for traffic expressed in seat capacity of 8.25 million. Within this total, London alone accounts for almost 5 million seats per month to the rest of the European Union (EU-27).
It is unlikely that the existing traffic rights between the UK and the rest of the EU will be abolished overnight. At present, the UK still benefits from the framework of the Single European Sky agreements, which allow any EU airline to serve any city in the Union, whether from the UK or as part of cabotage rights.
However, in the future, where Britain's exit from the EU is likely to have major consequences is precisely on this type of cabotage right or so-called "seventh freedom" right, i.e. offering the possibility of serving two States without necessarily including the State from which the airline originates. This could penalise easyJet, a British company operating from bases outside the UK and serving a host of European destinations. Under European law, it would find itself excluded from this type of activity outside British territory. The same legal headache applies to Open Skies, a British Airways subsidiary based in France, but also governed by British law. Not only could it be banned, under European rules, from operating between France and the United States, but it could also no longer benefit from the open skies framework that exists between the European Union and the United States. What about British Airways, which will only be able to hold 49% of a foreign airline? For the record, British Airways is the main shareholder, with 55%, in IAG, whose official headquarters are... in Spain.
On the other hand, in addition to working on a new agreement with the rest of the European Union, Great Britain should be obliged to renegotiate the various open skies agreements signed in recent years by the EU with other parts of the world. In particular, there are agreements between the European Union and Brazil, Canada, the United States and countries belonging to theEuro-Mediterranean Aviation Agreements "(Morocco, Albania, Bosnia-Herzegovina, Yugoslav Macedonia, Montenegro, Serbia, Kosovo, Jordan, Georgia, Moldova and Israel). Negotiations are underway with Ukraine, Lebanon, Azerbaijan, Australia/New Zealand, Tunisia and Algeria. Discussions are still ongoing with ASEAN, China, Japan, Egypt and Russia.
Ultimately, will Brexit have any real impact on Europe's aviation landscape? If the legislators work effectively, the transition will be smooth, like the open skies negotiations and the agreement reached a few years ago with Switzerland. As for Easyjet, Opensky or BA, they will certainly find a legal solution... probably by creating a subsidiary with headquarters in Continental Europe.
