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Brexit

Brexit

UK Exit from the EU and its impact on the UK Aviation Industry

This page is updated to cover the latest policy positions and agreements as they emerge.

January 2019 – Bob’s Brexit Blog

So the meaningful vote on the Government’s Brexit agreements has come and gone and we are no further forward.  The 29th March 2019 is fast approaching and the aviation community still does not know what regulatory framework or agreements will be in place when the day arrives.  The continued uncertainty is clearly not helpful for those UK and EU member state based business that want to trade and particularly fly across the new EU external borders, however this is the situation that we face for a little longer.

I am frequently asked what will be the likely outcome of the Brexit negotiations and what should aviation businesses do to protect themselves?  There remain a number of potential outcomes that will need a different response from affected people and organisations, both aspects of which I discuss below, however, as with any politically influenced change, the final outcome may be from far outside of our current expectations and anything that has existed before. In this case, your guess is as good as mine.

Outcome 1:  

The Conservative Party, supported by the DUP or another minority party, retain power and cross-party talks are rapidly launched to attempt to gain consensus or at least majority support for a new agreement.  Timescales are too tight for anything other than limited proposals to address the parties ‘Red Lines’, predominantly the Northern Ireland Backstop and there is a likelihood that the EU would not entertain further revision of the draft agreement before the March deadline.  In this case, the Government could make a request for the Brexit date to be extended, probably for a limited time, to allow for alternative proposals to be negotiated and the current unresolved situation would continue.  A transitional period is likely to be included in this option, extending the date by which organisations would need to resolve any EASA approval changes and revised EU trading and travel arrangements.  In this case – there would be no need to panic.

Outcome 2:

A ‘Hard Brexit’ occurs on 29th March 2019.  Unless alternatives are agreed beforehand, the current arrangements would result in the UK reverting to full trading independence under WTO rules and becoming a ‘Third Country’ to the EU.  With a few limited exceptions, all approvals, personal licences and certifications issued by the UK CAA directly or by UK approved organisations would also become invalid overnight and the future for EU citizens in the UK and vice versa, would be in doubt.  Route licenses and access for operators to the EU internal air transport market would also become invalid, requiring new bilateral Air Transport Agreements to be put in place, if they wish to trade within the EU.  In this case, the worst scenario in my opinion, UK issued EASA approved organisations would need to urgently apply for the transfer of their current approvals to be EASA granted ‘Third Country Approval’, a process which is already in place and operating.  Whilst most organisations can take advantage of this option, Air Operators cannot apply and Design Organisation scope of approval may be restricted.  There is likely to be a significant surge in applications following a ‘Hard Brexit’, so if organisations recognise this outcome as a significant risk to their business, it may be prudent to apply for EASA Third Country Approval now.  Will this outcome happen? Who knows!

Outcome 3:

The political situation in the UK changes to such an extent that Brexit would need to be put on hold to allow time for the development of new negotiation strategies, perhaps a second referendum to happen or new political allegiances to be struck. The European Courts have stated that it would be possible for the UK to withdraw its notification of leaving the EU and if this were the case, we could carry on as ‘normal’ – if ‘normal’ still exists after the last two turbulent years.  If this were the case, then UK CAA or UK-based Approved Organisations’ certificates and UK issued EASA licenses would remain valid and the freedoms of movement of people, services, and goods would be unaffected.  The extension of the Brexit date could also be requested as another option in this case, of course.

I know there are lots of ‘ifs and buts’ and a myriad of potential scenarios that will affect the future of the aviation sector in the UK and to a lesser extent within the other EU member states, and it seems that we will have to wait for a while longer to know what the final outcome will be.  My advice to organisations remains unchanged.  Consider the impact of a hard Brexit on you and your businesses against the potential costs and effort to achieve EASA Third Country approval, if available to you. To individuals holding EASA Personal Licenses, consider whether it would be prudent to apply for a transfer to another EU Member State.  As part of your ‘risk assessment’ consider the surge of applications that is likely for each and as a minimum, gain an understanding of the transfer process and costs and finally, whether it is worth starting preparations now.

I will provide further updates as the future situation becomes clearer, however if you would like to talk about your options, then please make contact by emailing consulting@bainessimmons.com

This blog was written by Bob Simmons, sharing his personal opinion on Brexit and its impact on aviation.


October 2018 – Mitigating the risks of a Hard Brexit

Bob Simmons provides an update on Brexit for organisations, AOC Holders and EASA Personal License Holders.

Further information available in the following links:

UK Gov guidance on Brexit if there’s no deal – https://www.gov.uk/government/publications/aviation-safety-if-theres-no-brexit-deal/aviation-safety-if-theres-no-brexit-deal

EASA Brexit Information page – https://www.easa.europa.eu/brexit

UK CAA guidance on transferring a personal license between states – https://www.caa.co.uk/Commercial-industry/Pilot-licences/Applications/Change/Changing-the-state-of-licence-issue/

EASA Part TCO Authorisation information and application – https://www.easa.europa.eu/easa-and-you/air-operations/tco-third-country-operators

Guidance on Flights to and from the UK if there’s no Brexit deal – https://www.gov.uk/government/publications/flights-to-and-from-the-uk-if-theres-no-brexit-deal/flights-to-and-from-the-uk-if-theres-no-brexit-deal

UK CAA Brexit Microsite – https://info.caa.co.uk/eu-exit/


July 2018 – Brexit and Aviation

Following the publication of the UK Government’s White Paper, titled ‘The Future relationship between the UK and the EU’, some clarity has started to emerge on the direction that the UK Government is taking with Brexit negotiations and its impact on aviation entities based in the UK. This paper aims to capture the latest policy positions and agreements as they emerge and discusses their potential impact on UK aviation.

This is a Baines Simmons interpretation of the Government’s White Paper put together by Bob Simmons, dated July 2018. The paper aims to capture the latest policy positions and agreements as they emerge and discusses their potential impact on UK aviation.

Download the paper now

 


Updated 16 May 2017

Following the recent triggering of Article 50, many UK aviation businesses remain unsure about what the future holds, with widespread concerns about how the changing economic landscape will affect EASA approved organisations in the UK. Baines Simmons Managing Director, Justin Scarborough, gives his view on the ongoing uncertainty around the effect of Brexit on the UK Aviation Industry.

What happens next for Civil Aviation Regulation?

The UK Government’s Policy Paper was published in February 2017 and with Article 50 being triggered on 29th March, the commentary in the paper still holds. There are 2 references to aviation but neither reveal anything new:

8.32 In the transport sector, there is a substantial body of EU law covering four transport modes (aviation, roads, rail and maritime), which governs our current relationship with the EU, and which will need to be taken into consideration as we negotiate our future relationship. For example, in aviation, the standard international arrangement is that air services operate under rights granted through bilateral air services agreements between nation states. In the late 1980s and early 1990s the EU created an internal aviation market whereby any carrier licensed in the EU is entitled to operate any service in the EU, superseding the old bilateral arrangements. As we exit the EU, there will be a clear interest for all sides to seek arrangements that continue to support affordable and accessible air transport for all European citizens, as well as maintaining and developing connectivity. We will also seek to agree bilateral air services agreements with countries like the US, where our air services arrangements are currently covered by an agreement between the EU and the US.

 8.42 There are a number of EU agencies, such as the European Medicines Agency (EMA), the European Chemicals Agency (ECHA), the European Aviation Safety Agency (EASA), the European Food Safety Authority (EFSA) and the European (Financial Services) Supervisory Authorities (ESAs), which have been established to support EU Member States and their citizens. These can be responsible for enforcing particular regulatory regimes, or for pooling knowledge and information sharing. As part of exit negotiations the Government will discuss with the EU and Member States our future status and arrangements with regard to these agencies.

 Although the EU regulations establishing EASA will cease to apply on Brexit, it will be in the interests of all parties for the UK to continue to participate in EASA. There are precedents for non-EU participation and this should be workable for the UK, but this is another critical piece of the post-Brexit jigsaw which will need to be addressed.

UK approval, permission and licence holders will be required to follow the requirements of UK Law (the Air Navigation Order or ANO) rather than EU law as is presently the case.  However, we would expect the CAA to adopt the current EU requirements, by simply replicating the requirements as a Civil Aviation Publication (CAP) and referring to these in the ANO or possibly by referring to the EASA requirements directly (if this is an option legally).

What are the key challenges?

Brexit will present various key challenges for the CAA and UK industry, including:

  • Currently, the UK CAA is a major contributor to EASA working groups (along with France and Germany), and as such has a significant influence on the published requirements. Should the UK adopt EASA requirements, the UK CAA and UK industry would have no formal mechanism to affect the content of the requirements or their future direction once the UK exits the EU
  • The UK would become a ‘Third Country’ under EASA, therefore, all current approvals would in theory need to be overseen by EASA or NAA’s from existing EU states.
  • Release documents (Form 1’s, CRS) issued under the UK ANO would not have mutual recognition in EU member states.
  • Licences may require ‘validation’ to be used in other EU member states.

While the CAA may initially adopt EU EASA requirements, with an industry as large as that of the UK it would be unlikely that EASA would wish to oversee all existing approvals or issue validations for licence holders. Additionally UK industry may become concerned in their lack of formal influence on EASA requirements in the longer term.

One potential scenario is the possibility of the CAA and/or other UK-based organisations, becoming a Qualified Entity in accordance with the Basic Regulation, Annex V, to allow them to complete organisation oversight activities on behalf of EASA in the most cost-effective manner.

Given that the UK CAA has not published a plan of action for the UK’s exit from the EU, it is likely that Approval holders will have ongoing concerns over the long-term viability of their EASA Approvals. Organisations with multiple sites may wish to consider the potential for relocating their primary site to another EU member state; note that there are differences in the interpretation of a ‘principle place of business’ across the EASA requirements and the European single skies agreement has clear references not just to the aforementioned principle place of business but also the shareholder/capital structure of such organisations e.g. majority ownership needs to sit in an EU member state.

If you have any specific concerns about how Brexit will affect your organisation directly, do get in touch with us so that we can put your mind at ease.   Baines Simmons is committed to meeting the needs of our European clients whichever regulatory and system of government.