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Deconstructing Brexit: Implications for Business Aviation

With all the political turmoil on the U.S. side of the Atlantic early this year, it might have been easy to under-appreciate the impact on aviation of Britain’s exit (Brexit) from the European Union (EU).

The UK’s long road to Brexit took some hairpin turns after the course was set by a controversial referendum in June 2016. Fears of a “no-deal” Brexit leading up to the Dec. 31, 2020 deadline raised a number of questions that, thankfully, did not need to be answered. It wasn’t until late on Christmas Eve 2020 that the pathway was cleared for the Jan. 1, 2021 implementation of the Draft EU-UK Trade and Cooperation Agreement.

Implications for Aviation

It comes as no surprise that aviation concerns were among the top priorities in hammering out the draft trade agreement. While the impact on airlines got most of the headlines, the issues for business aviation were no less critical, at least for those directly involved. The European Business Aviation Association (EBAA) and the British Business and General Aviation Association (BBGA) are helping members of their groups comply with the new requirements.

Primary concerns over Brexit-induced changes to aviation practices centered on safety-related operational and regulatory procedures, but they also involved issues of economic competition. The goal was to ensure that market conditions remained as fair as possible for operators and consumers alike. EBAA Secretary General Athar Husain Khan said while introducing an EBAA-hosted webinar on Brexit that the association’s mandate is to “focus on solutions.”

The British Civil Aviation Authority (CAA) and EASA set as their priorities a transition that is “as seamless and competitively level as possible,” said CAA’s head of airline licensing and consumer marketing, David Kendrick, of the split. “Both parties have been partners for such a long time. That’s the key element here. The UK is still going to be a major element of activity within the European aviation space. The UK approach has always been one of collaboration.”

But both sides acknowledge this won’t be easy. On the operational side, there would have to be some level of duplication in meshing their parallel approaches to safety, certification, maintenance, parts production approvals, and licensing of pilots, maintenance technicians and cabin crew, etc. This can create complications, say, for a multinational maintenance organization that moves licensed technicians from base to base as market demand warrants.

On the economic side, ensuring a level playing field by maintaining reciprocity – not only with EASA, but also among national aviation authorities – has been a critical moving part.

“It’s a time of great opportunity for the UK to reposition itself and to deal with some of the things we’ve struggled with previously. The government and the CAA are listening very closely to us.”

Aoife O’Sullivan Chair, British Business and General Aviation Association

Can I Still Fly to the UK?

Most operators, including U.S.-based Part 91 and 135 operators, are primarily concerned with how the economic aspects of the draft agreement are progressing. In other words, “Can I still fly to the UK?” and “How will my operations be different under the draft agreement?”

For Part 91 operators, the changes should be minimal. The international “Freedoms of the Air,” first established in 1944, are written for commercial operations, so a non-commercial flight is relatively unaffected by the new UK regulations.

However, for airlines and on-demand charter operators, the third freedom (the right to carry passengers or cargo from one’s own country to another) and fourth freedom (the right to carry passengers or cargo from another country to one’s own) remain intact under the draft agreement, subject to “block permits.”

Kendrick explained: “The CAA will grant, for a three-month period in the first instance – subject to qualifying criteria – [block permits] for an EU air taxi operator to undertake third and fourth freedom flights. [Each flight] will not need an individual permit. The difficulty is there is a competitive angle to this – negotiating with other authorities to do the same for UK operators.”

How well this reciprocity ultimately works out is one of the “known unknowns” going forward. Political rifts have the potential to spill over into the reciprocity negotiating process. But Kendrick is optimistic, describing the CAA mandate to maintain, “clarity, confidence, and stability” in the negotiations. He acknowledges, however, that for many countries, negotiating reciprocity in block permits is new territory. While not citing them by name, he said conversations with a number of countries’ national aviation authorities had been “warmly received.”

However, fifth freedom rights (which allow a carrier to conduct flights between foreign countries as a part of services connecting its own country) is cabotage and is restricted under the agreement.

For example, granting a permit for a charter flight from the U.S., the EU or from any other country to the UK, and then picking up new passengers to fly a paid flight within the UK or on to a third country, is a step further than the agreement allows.

“On cabotage,” said Kendrick, “air taxi operators can apply for it and it will be considered on its merit. Generally, however, the principle is that it won’t be granted.”

However, fifth freedom rights have been allowed for cargo flights. And Kendrick added that air ambulance flights are considered “in a slightly different category. It is very likely that, for a humanitarian [mission], we would consider a cabotage flight.”

A British Perspective

Aoife O’Sullivan, chair of BBGA, acknowledged with typical British understatement that the UK trade group is “slightly obsessed” with Brexit. “We have to be,” she said. “It’s a massive change for the UK. It’s also a time of great opportunity for the UK to reposition itself and to deal with some of the things we’ve struggled with previously. The government and the CAA are listening very closely to us.”

During the first week of the draft agreement, however, BBGA was not encouraged by the reciprocity negotiations with some EU member states.

BBGA CEO Marc Bailey said, “Disappointingly, their approach has not created the expected level playing field we believed were simple third and fourth freedoms. A 48-hour application period, heightened security and an initial application fee of 4,000 euros [$4,400] is not conducive to swift, non-scheduled commercial operations, primarily used for business executives doing business overseas.”

Bailey told operators, “The top 10 priorities could take several months to reach conclusion… therefore, please continue to share any permit application issues that you are facing.”

“The British Civil Aviation Authority and EASA set as their priorities a transition that is 'as seamless and competitively level as possible.'”

EBAA Concerns

EBAA officials also point out there are other areas of concern to consider in the agreement.

“Not only will the agreement’s horizontal level-playing-field provisions, including those on social and environmental issues, apply to aviation; it also includes specific provisions on business issues such as ground handling and [airport] slots, alongside provisions for the protection of passenger rights. Furthermore, the draft agreement ensures that neither the UK or an EU member state can prohibit the taxation of fuel supplied to aircraft on a discriminatory basis, as this would go counter to ensuring a level playing field and meeting climate-neutrality targets.”

EBAA assures operators it is “constantly monitoring Brexit developments and is in touch with the respective national and EU authorities. EBAA will continue to provide updates as appropriate and provide further analysis of the draft agreement to better understand the implications of the new relationship between the EU and the UK.”

As always, NBAA is working closely with EBAA and other organizations to provide its members with assistance and updated information.

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