Event Report: Brexit and Aviation
Gabriel Grigore (Dublin City University)
On 15 November 2018, the DCU Brexit Institute, in partnership with Dublin Airport Central organised a half-day conference on Brexit and Aviation, hosted at the Grant Thornton headquarters, in Dublin. After an opening message of welcome from Michael McAteer (Managing Partner, Grant Thornton), this event featured an opening Keynote Speech by Dr. Wolfgang Schuessel (former Chancellor of Austria), introduced by the Chair Federico Fabbrini (Director of the DCU Brexit Institute). This was followed by an expert panel discussion. The following is a summary of the event.
Opening Keynote Speech
Dr. Wolfgang Schuessel, former Chancellor of Austria delivered the Keynote speech entitled ‘Brexit and the future of Europe’. Dr. Schuessel said that Brexit was a “lose-lose” for both the UK and Europe and added that the EU needs to “wake up and make up our minds”. He warned of the huge implications of a no-deal for both sides. Dr. Schuessel referred to the tens of thousands of pages of legislation – the acquis communautaire – that would need to be re-written into UK national law to keep the UK aligned with EU law, if that was what the UK chose to do. Issues of healthcare and the mutual recognition of qualifications and standards were highlighted as having large implications post-Brexit. He also noted that unlike in the UK, Brexit is not the most important national issue for other member states, with the exception of Ireland. Dr. Schuessel closed by emphasising the achievements of the EU and said that, since Brexit, the rest of the member states have shown strong support for the EU and he believes that there is “no need to worry” about further exits.
An expert panel discussion followed, featuring Cathal Guiomard (DCU), Vincent Harrison (DAA), Cathy Mannion (Commission for Aviation Regulation) and Tim O’Connell (Grant Thornton). Sinéad O’Carroll (The Journal) chaired the discussion.
Cathy Mannion (Commission for Aviation Regulation) spoke about the ownership and control issue for licensed carriers in Ireland, and said that this was an important matter to resolve, making specific reference to Ryanair and Aer Lingus. She said that the impact of Brexit on airport charges is unknown at the moment but referred to the 33% of Irish air traffic that goes to and from UK airports. The issue of planning ahead in terms of slots for airlines post-Brexit is difficult according to the commissioner. Airlines start selling tickets up to one year ahead, so an airline operating to and from the UK needs to consider whether to retain their slots. She believed that it is better to hold the slots in case they would be needed. Travel agencies are also facing uncertainty over selling travel packages that include air tickets. She alluded to three travel agency insolvencies that have already occurred this year.
Vincent Harrison (DAA) spoke about the possibility of a no-deal Brexit with no flights between the UK and Dublin until bilateral agreements could be negotiated. Mr. Harrison referred to an EU Commission note of 13 November indicating that in principle ‘point to point’ agreements could be drawn up due to the importance of keeping flights going, provided the UK reciprocated However, he said that it was “naive” to think that deals between the U.S. and the EU would extend to the UK after Brexit and said that there is “lots of uncertainty ahead”. The Dublin-London route is the busiest route in Europe and the second busiest in the world. He emphasised that Ireland is proportionally affected more by Brexit due to the amount of trade between Ireland and the UK, including air traffic. Mr. Harrison revealed that inbound tourism from the UK to Ireland has decreased by 7% in 2017, which shows the effect of uncertainty, despite the fact that Brexit hasn’t even happened yet.
Tim O’Connell (Grant Thornton) further discussed the issue of ownership and control highlighting the Ryanair case. While currently, Ryanair has 60% EU ownership, after Brexit, this will drop to 40%. So, under EU legislation, it would not be considered an EU airline (requiring minimum 50% EU ownership). He then touched on the loss of the UK to EASA driven safety regulations, stating that along with France and Germany, the UK was one of the main driving forces. Mr. O’Connell sees this relationship damaged following Brexit. He noted that investor appetite in aviation has taken a hit amid the uncertainty, citing that insurers have said that they will only engage in talks after Brexit.
Cathal Guiomard (Dublin City University) spoke further about the challenge for the UK in negotiating air service agreements with the other 27 member states and said that doing this individually would probably not be legal since this is now a Brussels responsibility. He also noted that the legal status of air service agreements, negotiated prior to EU law, was very uncertain. As for regulation, Mr. Guiomard made the analogy comparing regulation to plumbing, something you only notice when there is a problem. He referred to the vast number of EASA safety rules that the UK contributed to and said that the “enormous rule books would need to be re-done by the UK” if it left EASA. Even if the UK does remain in EASA, it will be as an “observer”, not a voting member.
After a general question-and-answer session involving all the panelists, the conference concluded, with Professor Fabbrini thanking the paricipants, sponsors and hosts for their support.