BREXIT FOR AVIATION – WHATS´S NEXT?

After the decision of the referendum in UK to leave the European Union, one big question is also about the future impact on the Aviation industry. The dramatic drop of Airline shares during the past weeks show clearly, that the Brexit is not only troubling UK Airlines and Airports, but also European ones.

There are sveral constraints which will effect the Aviation market by this decision. First of all it should be the main target to establish as soon as possible an outlook for the economy about the next steps to go. Securing the state-of-the art thereby seems to be the best outcome for all participants.

ECAA

The European Common Aviation Area (ECAA) is the agreement initiated in 2004 to grant access to the European Aviation market to the EU member states and it´s neighbours part of this agreement. Currently this includes 27 states which profit from ECAA being the regulatory instance in negotiating flight regulations between ECAA and other states and territories. Getting back to ECAA seems to be the most reasonable way for UK as this would grant access to the single european sky and economic market. In this case UK would have to align with EU principles defined to join the ECAA as it has done with other members, not being part of the EU (e.g. Norway). A strong economic cooperation and probably also the freedom of movement could be set as pre-conditions for this agreement which could lead to recurring discussion about immigration to the UK.  Additionally by not being a EU member state, UK lowered now their own position as only EU members are able to have influence on the policy applied by ECAA.

Bileteral agreement with EU

For sure the UK could also set-up a bileteral agreement with EU to negotiate about the aspects of air transport like the “Swiss model”. This would require the willingness of both parties to do so and could end up in a process taking several years to come.

Beside this, UK must also renew agreements with other air traffic regions like the U.S. which was handled in the past by ECAA in mission of it´s memeber states.

Single Agreements with each member state

A possible Option, but pretty unlikely to come, is the negotiation with all single EU member states about the principles of air transport. This process would be very time consuming and can´t be the way to go forward. On a political aspect this would also neglect the EU and it´s existing bodies and agreements which contradicts the aproach of the past years.

Uncertainty remains

…unless there is a clear way and signals by both, the UK governement and the EU comission about the preferred way to go forward. So far, the market will keep volatile and unstable, effected by this uncertainty caused by the general economic conditions and the currency rate of GBP to EUR. Actually both, the UK and the European market will suffer regarding passenger numbers and freight volumes in a time of recreation after the last downfalls after the financial crisis.

If you like to get some more insights please have a look at this link http://centreforaviation.com/analysis/brexit-up-in-the-air-implications-for-aviation-if-the-uk-votes-to-leave-the-european-union-262860

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