Iberia must prove it's 'Spanish'

SPAIN'S flagship airline Iberia has seven month to prove it is 'Spanish' to continue operating in the event of a no-deal Brexit.

As part of the IAG holding that includes British Airways and Air Lingus, the Spanish airline would be considered a non-EU company if no deal is reached by March 29.

This means Iberia and its subsidiaries Vueling, Iberia express, Air Nostrum and Level would not have a licence to operate in EU countries - which includes all its Spanish domestic flights.

The huge impact this would have of the domestic market is obvious, especially for passengers travelling between mainland Spain and the Canary or Balearic islands.

In the event of a no-deal, air- lines have been given a sixmonths respite period by aviation authorities to prove whether they are EU-owned or UK-based. Therefore, Iberia has until October 27 to convince the EU it is a 'Spanish company' with the majority of its capital coming from the EU.

Irish airline Air Lingus faces the same predicament.

Qatar airlines and US funds currently own 40% of IAG, and when the UK leaves the EU, that percentage will rise significantly and place the majority of IAG capital outside the EU.

The knock-on effect of having Iberia aircraft grounded would seriously damage the tourism sector, starting with AENA and Madrid-Barajas airport at which Iberia accounts for the vast majority of flights from Terminal 4 and is the main European hub for flights to South America.

UK airlines could lose their licences to operate in the EU in the event of no-deal, which is why some have taken steps to ensure over 50% of their capital is from the continent.

EasyJet has seen its share of EU capital rise from 47% in November to the current 49% and is confident it will be above 50% by March 29.