Ryanair boss wants an urgent Brexit plan
At an aviation summit in Brussels this past week, Europe’s main airlines put on a display of unity over the challenges ahead. But the industry’s chief executives were divided when it came Brexit.
The United Kingdom’s scheduled departure from the European Union in March 2019 has provoked widely varying reactions from carriers in the 28-nation bloc. At one extreme are dire flight-cancellation warnings by Ryanair chief executive Michael O’Leary and at the other is nonchalance by his counterpart at British Airways owner IAG SA, fellow Irishman Willie Walsh.
The airline industry differs from others such as energy and chemicals where, from London to Lisbon, companies uniformly say that the UK’s departure is a major headache. The dissonance suggests some carriers sense the possibility of a Brexit accord that would prevent hassles for tens of millions air travelers while ushering Britain, home of Europe’s busiest airport, out of the European single aviation market.
“It’s about jockeying for position in the market and potentially gaining an advantage over competitors as the future relationship between the UK and the EU is worked out,” said Michael Tscherny, who advises companies on European policies including aviation at GPlus Europe in Brussels. “On the basic question of whether flights will stop the day after Brexit, nobody has an interest in planes not flying between the UK and the rest of Europe.”
No industry in the Brexit process has a more direct link to citizens than aviation, which carries 1 billion travelers a year within the EU. The UK plays an outsized role, accounting for a quarter of the total, making it the third-biggest aviation market behind the US and China.
This economic reality confronts the Brexit negotiators, who must untwine the UK from decades of European aviation rules that have expanded traffic and ownership rights and streamlined certifications.
Letting this regulatory framework lapse in the UK without a substitute arrangement would end EU flight rights for Britain and vice versa the day after Brexit.
“I am determined to avoid that particularly absurd consequence of Brexit,” EU President Donald Tusk said in Luxembourg on March 7, when the UK’s partners in the bloc produced a blueprint for future economic ties with Britain. “To do so, we must start discussions on this issue soon.”
Back in Brussels the day before, Mr O’Leary of Ryanair said a stalemate in the Brexit negotiations points to serious disruptions for airlines. He cited two particular challenges: keeping planes flying between the UK and the EU and preventing the bloc’s 49 percent limit on foreign ownership of carriers from affecting operators in Europe including IAG, which also owns Aer Lingus in Ireland and Spain-based Iberia. “We see no progress toward a solution that will address either the flight rights or the ownership rules,” Mr O’Leary, a staunch opponent of Brexit, said. “The first industry over the cliff will be flights. And I think maybe that’s the way you bring about the crisis that gets everybody in Britain to say ‘well, maybe let’s look at this again.”’