Feb. 6, 2018

How will the U.K.’s Brexit from the European Union affect business aviation?

At the moment, it’s unclear, and the aviation community is increasingly concerned about the breakup’s potential impacts on membership in the European Aviation Safety Agency (EASA), air traffic rights, aircraft ownership, customs duties and myriad other issues.

Hoping to influence negotiators on both sides to minimize future disruptions, the European Business Aviation Association (EBAA) published a “Brexit Scenarios for Business Aviation” report, through global legal firm Clyde & Company, in advance of last week’s EU Affairs Ministers meeting in Brussels, Belgium. View the report.

The ministers agreed to guidance for EU negotiators, who are targeting an “implementation period” from March 29, 2019, through Dec. 31, 2020. During the transition period, EU regulations would continue to apply to the U.K. However, the U.K. would be stripped of its representation in the European Council, European Parliament and European Commission – the agencies that ultimately decide changes to EASA regulations.

Given the international nature of business aviation, EBAA prefers that the stakeholder roles be preserved, at least for aviation cooperation between Britain and the 27 remaining members of the EU.

“EBAA looks forward to working with negotiators in both Brussels and London to ensure the specific expectations of the business aviation sector are appreciated, and that any future agreement is mindful of the very direct consequences that could arise for our sector and the European businesses and citizens we serve,” said EBAA CEO Brandon Mitchener.

The EBAA Brexit analysis outlines several possible scenarios and their ramifications for business aviation in key areas (ownership and control rules, customs duties and value added tax, EASA, access to routes for U.K. operators and EU operators). The scenarios encompass:

• Maintenance of the existing situation – which few observers expect, unless the U.K. re-votes and cancels the planned exodus form the EU
• A move for membership by the UK in European Economic Area – the model applied to such countries as Norway and Iceland
• The negotiation of a U.K.-EU bilateral aviation agreement (the so-called Swiss model)
• A decision for the UK to join the European Common Aviation Area
• An ultimate understanding that no “aviation deal” will be reached, and a subsequent reversion to previously agreed-upon bilateral air services agreements
• Negotiate new air service agreements with the EU or individual EU member states

If there is no negotiated agreement, a so-called “hard Brexit,” or no separate agreement on aviation, the implications are global, as the U.K. would “automatically cease to be a party” to multilateral air transport agreements, which the EU has negotiated with third countries, according to the EBAA report.

“It is unlikely that there will be a special deal for the aviation sector, let alone the business aviation sector, in the absence of an overarching trade deal,” the report concludes.

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