Aviation: UK-US post-Brexit bilateral agreed

November 29, 2018

 

Some good news today on the Brexit front as far as commercial aviation is concerned.  On November 27 the UK and the US completed negotiations on a new bilateral air services agreement that will enable flights between the two countries to continue after the UK leaves the European Union next year.  The arrangement has to be ratified by both governments.

 

In recent years the framework governing flight operations between Europe and the USA, and rules for airline ownership and joint ventures, have been applied on a pan-European 'open skies' basis.  However, once Britain left the Union there was no legal basis on which transatlantic connections between the two countries could continue to operate.  No one, least of all The Aviation Oracle, really believed that flights would just cease but new rules had to be negotiated and there was always room to doubt the process would be completed in time, especially with everything else the government had on the agenda.

 

Discussions over the deal have been ongoing for much of this year, with airline ownership being a particular sticking point.  The US would normally require UK airlines to be majority owned by UK interests.  That was clearly a problem with British Airways being part of the International Airlines Group headquartered in Spain, Virgin Atlantic in which Delta has a 49% interest and soon Air France / KLM another 31%, and Norwegian Air.  Now that obstacle has been overcome with the Americans agreeing that existing UK carriers owned by EEA interests will retain grandfather rights to operate across the Atlantic.  However, future airline ownership changes involving non-UK nationals will have to be agreed by the US.  It is almost certain too that any new entrant into the market will have be majority British or American owned.  The US has also stipulated that joint venture immunity for arrangements such as the shared revenue deal between American Airlines and British Airways on the London-New York route can be maintained.

 

Transport Secretary Chris Grayling said that “this new arrangement and those concluded with eight other countries around the world are proof that the UK will continue to be a major player on the world stage after we leave the EU.”

 

A government statement added that the deal “will guarantee the continuation of the vital transatlantic routes used by tens of millions of passengers a year, ensuring people can continue to travel easily between the UK and US and maintaining choice and good value travel.”

 

 

Grayling’s department has already signed similar deals with Albania, Georgia, Iceland, Israel, Kosovo, Montenegro, Morocco and Switzerland while the process with Canada has reached an advanced stage.  While it is good to learn that progress is being made on signing up new bilateral air service agreements, there are still a lot of countries outside of the EU to which UK airlines might not have access come March next year.

 

Text © The Aviation Oracle

 

 

 

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