No-deal Brexit will ground flights, warns Glasgow Airport
THE chief executive of the company which owns Glasgow and Aberdeen airports has warned of flights being grounded and airlines going bust in the event of a no-deal Brexit.
Flights in and out of Scotland are currently governed by 155 international flying agreements which the UK has in place with countries around the world, with 44 falling under the European Commission’s Single European Sky directive.
The 44 agreements covered by the regulation, which effectively allows airlines to fly between the UK and other EU countries, account for 85 per cent of the flights in and out of the UK.
But the country will fall out of those agreements by the Brexit date of March 29 next year – if a new agreement is not reached with Brussels.
Derek Provan, the chief executive of AGS Airports, warned that a no-deal Brexit will lead to planes being grounded in Glasgow, Aberdeen and other UK airports.
Asked to define the worst-case scenario from a disorderly Brexit, Mr Provan likened the situation to 2011, when hundreds of flights in Europe were cancelled because of the vast ash clouds created by an Icelandic volcano.
In a wide-ranging interview with The Herald, the former chief operating officer of Heathrow Airport said: “Eighty-five per cent of the flights fly in and out of Europe. What that would mean is aircraft on the ground, aircraft physically unable to take off because they don’t have any air space to fly into, because you don’t have an agreement for that aircraft to fly through that air space.
“So, you would be talking about 85% of your schedule sitting on the ground until such times an agreement would be made.
“It would be similar to the volcanic as scenario, only you are planning it, which seems incredulous.”
Mr Provan’s comments come as the UK Government issues a
series of technical notices advising people and businesses how to prepare for a no-deal Brexit.
Notices for the aviation sector are expected to be issued imminently.
With Ryanair having previously stated it will pull flights from the UK in the eventuality of a hard Brexit, Mr Provan expressed dismay that the UK was hurtling towards that scenario. He said: “How long would that last? Who knows?
“If you had asked me four months ago I’d have said it wouldn’t last a day, because the scenario would never happen.”
He added: “There is no mitigation against no deal, however long that takes place. Unless you have
got an agreement that sits within there, at this moment in time we don’t understand what those mechanisms would be to allow aircraft to fly.
“The UK Government has been very clear that aviation is a priority, but that is not what we are seeing.”
The airport chief, who is also concerned about the UK losing its place in the European Aviation Safety Agency (EASA), said AGS maintains regular dialogue with UK Government officials.
The most recent meeting, which took place around one month ago, did not give him confidence a deal was likely.
Mr Provan, whose company employs 1,000 staff, said: “Now we
are being advised that is what we should be planning for.
“It would mean aircraft on the ground until such times there is an agreement.”
As well as the risk of plans being grounded, Mr Provan, who succeeded Amanda Mcmillan at the helm of AGS in January, said there is a risk the airlines could go to the wall if new flying agreements are not stuck before the official Brexit date of March 29, 2019.
He said: “Most airlines are operating with very tight business margins, so they would survive for days or weeks at maximum.
“They wouldn’t survive any longer than that.”
AS someone who began his career in the Strathclyde fire service, Derek Provan might just have the ideal background for his current vocation.
Mr Provan was appointed chief executive of AGS Airports, owner of Glasgow, Aberdeen and Southampton airports, in January. The role may not literally require him to extinguish fires, but it certainly demands a cool head and pragmatic thinking during turbulent times.
And that is especially helpful when you consider the cross-winds currently buffeting the business, with Brexit, Air Passenger Duty, Prestwick Airport and efforts to replace the loss of key Ryanair routes earlier this year all commanding his attention. The loss of an American Airlines route to Philadelphia was added to that list this week too.
On a personal level, Mr Provan is delighted to be back where it all began for him in the aviation sector 20 years ago. He moved into management at Glasgow Airport after spending five years working in its fire service, which he joined in 1998 after a decade with the Strathclyde brigade.
A range of roles followed, culminating in his appointment as operations director – three months before the airport was struck by a terrorist attack in 2007.
Mr Provan, who has since held a raft of senior operations positions with
Stansted, Aberdeen and Heathrow airports, acknowledged that Glasgow, Aberdeen and Southampton have all prospered in the past. But he is candid about the depth of the challenges AGS faces now, be it from a political, market or infrastructure perspective.
In Glasgow, much of the energy expended by Mr Provan and his executive team is being geared towards overcoming the decision by Ryanair to shut its base there and slash the number of routes it operates out of the airport from 23 to just three.
“We get some of that impact in quarter four, but 2019 is when we see the full effects of that,” Mr Provan said. “And we have to find a way to get the business back fit for purpose in 2020, because the greatest challenge that we have got at this moment in time is there simply aren’t enough aircraft on the ground for 2019. So, there is a piece of work for us to prepare moving forward.”
At the time of the decision, Ryanair cited its frustration with the Scottish Government over delays to its pledge to cut Air Passenger Duty (APD), declaring the tax has undermined the attractiveness of the aviation market in Scotland.
Mr Provan expressed his own dissatisfaction over the lack of progress on APD, which stems from a stalemate between the Scottish and UK Governments. Holyrood is determined the Highlands and Islands retain their exemption from APD, which requires legislative consent from the European Union. However, the Scottish Government requires Westminster to seek that approval, given Scotland’s membership of the EU comes through the UK. Scottish ministers say Westminster is dragging its heels, but regardless of what is causing the impasse, Mr Provan said it is undermining the competitiveness of both Glasgow and Aberdeen.
In the context of the Ryanair withdrawal, he said: “What that resulted in to us was a 10 per cent loss in passenger numbers at Glasgow Airport.”
And there is more than one dimension to the Ryanair decision that concerns AGS. Mr Provan said the withdrawal of the Irish airline from Glasgow will “realistically” lead to Ryanair putting more of its aircraft back into Prestwick Airport, which has been under public ownership for nearly five years. The Scottish Government acquired the airport to safeguard jobs in 2013 after previous owner, New Zealand-based Infratil, ran up losses of £2m.
The most recent accounts for Prestwick’s holding company state that the value of loans extended to the airport from Transport Scotland stood at £30.4m at March 31, 2017, up from £20.8m the year before, while pre-tax losses narrowed to £8.6m from £9.2m.
Mr Provan said that Prestwick’s publicly-owned status effectively means that Ryanair is being “subsidised” to operate there.
“All of the money that the government is paying is going straight into that operation,” he said.
“It would be the equivalent of all that money coming into the Glasgow purse, and then going to the airline. But we can’t do that because we have to make it a commercial enterprise.”
Mr Provan said he understands ministers’ motivation to protect employment at Prestwick, which supports around 200 jobs.
“But the loss of Ryanair to Glasgow is somewhere between 100 and 150 jobs,” he added.
A move back into the private sector