As Brexit looms in the United Kingdom, British Airways is working behind the scenes to ensure a smooth transition and no service disruptions. One contingency: British Airways will no longer be a British company.
Brexit goes into effect on March 29, 2019. Absent a broader agreement, European airlines will need to seek bilateral permission in order to serve the United Kingdom. Likewise, UK airlines will need permission from both individual states and the European Aviation Safety Agency (EASA). If no grand divorce agreement is reached between the UK and European Union, airlines hope a smaller agreement on air travel can be reached. At issue is more than landing rights: safety and licensing requirements also come into play.
Publicly, British Airways continues to assert its confidence a deal will be reached:
We remain confident that a comprehensive air transport agreement between the EU and the UK will be reached. It’s in the UK and the EU’s interests to have a fully liberalised aviation agreement. Aviation liberalisation has been a great success story across Europe, benefiting 1bn customers each year and creating a huge number of jobs across the continent. Even if there is no Brexit deal, both the EU and the UK have said they will put an agreement in place that allows flights to continue.
But behind the scenes, BA is exploring options to tinker with International Airlines Group (IAG), the company that owns British Airways, Iberia, Vueling, and Aer Lingus, in order to sidestep any political paralysis. Currently, IAG is registered in Spain and operates from London. While some legal scholars say this already solves the issue, most agree that the threshold of 50% EU ownership in order to be considered an EU airline will not automatically be met. Moving headquarters to Spain and retooling ownership stakes may be necessary to keep British Airways freely operating within Europe. One member of the UK Labour Party dubbed the potential new company Spanish Airways.
Spanish Airways. https://t.co/f3z898g22l
— Tom Watson (@tom_watson) November 12, 2018
Meanwhile, EasyJet has set up EasyJet Europe and already moved many of its aircraft to that subsidiary. Ryanair, although operating extensively from the UK, is an Irish flag carrier with registered bases in other EU nations.
My prediction is that this is all going to work out okay for travelers. In fact, I think there will be another national referendum in the UK and Brexit will be rejected. But even absent that and a formal agreement, Europeans will not shoot themselves in the foot by blocking or severely hindering UK traffic. It will hurt their own citizens too much. But in the interim, that won’t stop British Airways from doing anything in its power necessary to ensure a smooth transition next spring…even if means BA technically becomes Spanish Airways.
image: British Airways