The mere possibility of a "cliff edge" Brexit is already creating uncertainty for airlines, who fear their planes will be grounded on the tarmac come March 2019by Alex Dean / October 27, 2017 / Leave a comment
The Article 50 clock is ticking—but Britain doesn’t seem to be getting anywhere. The prospect of a “no deal” outcome in March 2019 is looming. This would present all sorts of problems—some of which you’ll have heard of. But others you won’t, and it’s these we want to focus on in this series. Earlier this week, Steve Bloomfield wrote on what could happen to our data. I want to talk about flights, and one problem in particular that could result from plunging over the cliff edge. Why will Brexit impact flights? The basic problem stems from something called the “open skies agreement”—and the fact it could lapse on Brexit day. All flights from one EU country to another have for the last 25 years been governed by this deal, which is officially known as the “EU internal market for aviation.” It allows any EU airline to fly between any two EU airports. If we don’t strike a deal, this will all come grinding to a halt for us. No more flights from Britain, at least temporarily. That sounds like chaos—but it’s just flights in Europe, right? Ah—you wish. Many other countries would be off limits too as Britain can only fly to them now thanks to deals arranged through the EU. All flights to the United States, for instance, are governed by the EU’s Air Transport Agreement. This kind of thing is the reason Michael O’Leary, chief executive of Ryanair, was getting so worked up during the referendum campaign. Surely the government won’t let this happen? I hope not—and it may get its act together over the coming months. But even Chancellor Philip Hammond has conceded a flights-stuck-on-tarmac situation is “theoretically conceivable.” And a “no deal” Brexit is a no deal Brexit—no agreement on anything whatever. That includes flights. Ok, well at least we’ve got until the end of March 2019 to sort all this out. Actually, no—and here’s the bit that no-one’s really talked about yet. Put simply, it’s not long until airlines have to start selling tickets for 2019, and the “no deal” risk is therefore about to create a whole lot of uncertainty over who can buy what, when, to where. While on many issues the “no deal” chaos would only kick in after we leave, the flights problem kicks in a year earlier—so in just six months time. Ok, that sounds really concerning—but explain a little bit more I’ll let Chris Grey, a professor of Organisation Studies at Royal Holloway with a specialism in Brexit, do that. According to him, “The issue will really start to kick in from March 2018—a year before Brexit day—because from then airlines will be making available seat bookings for a year hence. But unless they know, which they currently don’t, what will be agreed about flying rights then they either won’t be able to take bookings for routes in Europe (and possibly some other routes) or—more likely—they will sell them with a condition that the booking may not be valid, and if the flights get cancelled there would be no compensation for the passenger.” Wait—so I could be left out of pocket personally? That’s what it looks like—and travel insurance may not be much help. According to Grey, “It’s worth saying that there will be knock on implications for travel insurers who will either have to cover the risk of flights not occurring and therefore presumably adjust premiums or, more likely, exclude Brexit from the risks covered.” People just won’t stand for this, will they? Correct. At the moment, Brexit for the most part remains in the abstract—the potential problems are in the future, or they’re happening to other people. This could be one of the first instances of the general public taking a hit. Grey said: “the flights issue will, I think, be the first time that all the talk of ‘business uncertainty’ will really, directly and personally impinge on the general public.” Wouldn’t it have been easier to just “Remain” in the first place? Yes. Yes it would.