Tuesday, 8 November 2016

Flying kites of doom muddy Brexit.

Politicians, business people with vested interests, media pundits and others catching the mood of the moment are flying more speculative kites about possible effects of Brexit than there are aircraft in the European skies.

The latest bit of alarmism comes in doom laden warnings that with the end of the European open sky air services between the UK and Europe could collapse. The Times relates " outside of open skies Britain would have to negotiate new complicated bilateral arrangements in which UK airlines can fly to Europe and vice versa. Complicated?.Really? Bilateral air service agreements are the general norm worldwide. They were in place between the UK and European countries for years before open skies and  largely worked well, despite some inbuilt protectionist tendencies.  No agreements?  Back to pre World War 2 and the ferries? We really don't think so. Routes to the UK and London in particular are the most profitable in most EU airlines' shorthaul portfolios They aren't going to let their governments sever the links in a game of political fisticuffs. New point to point bilaterals between the UK and European countries if kept simple should be easy enough to establish in days or at most weeks, not months. The UK for its part could ,- and should,-just declare open skies.

There could be a problem for British airlines which fly within the EU but solving the legality of that should not be difficult either by the establishment of  European subsidiaries or by reciprocal agreements. Easyjet is the big British player in this market and will have the most furrowed brows. IAG, whose cash cow BA is already a Spanish registered company despite its Head Office being in the UK, only flies intra European services with its Spanish based Vueling brand. To keep BA's UK rights legal IAG may have to spin it off again as a UK company but again that should be manageable without taking it totally out of the group.

Meanwhile a certain ardently Europhile Irishman, was yesterday lamenting the possible complications of Brexit and calling the whole affair "a shambles". That's easy enough to say especially as these are very early days in a two+ year process. It gets the headlines but the time might be better spent for all businesses, especially airlines and the tourism industry, to stop wailing about disaster scenarios and get on with plans to extract the best from what is after all only a return to the status quo ante. Let's not forget that the UK already had Europe's strongest and most diverse airline industry well before it joined the EU on January 1st 1973. Time for calm on the boardroom flight decks.

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