On the 28 March 2017, Article 50 was triggered by the UK Government. The period of negotiation of the UK’s exit has been extended from 29 March 2019 to 31 October 2019 or ‘Brexit day’.
At the time of writing, there is approximately one month to ‘Brexit day’ and an orderly departure of the UK from the EU with a mutually agreed withdrawal agreement remains uncertain. Since 2017 the EU Commission has engaged with multiple stakeholders to assess and address the impact of Brexit for the aviation sector. In the absence of any special provisions, the withdrawal of the UK from the EU would end all rights and obligations ensuing from EU law in respect of market access as established by EU aviation regulation (EC) No. 1008/2008.
The EU Commission introduced temporary contingency measures to ensure a level of connectivity and continuity of services in face of Brexit and pending a comprehensive air transport agreement between the EU and the UK. The measures applied are limited to what is viewed as being strictly necessary to address the major problems that may ensue from a disorderly withdrawal of the UK for the aviation sector and to avoid abrupt disruption or cessation of services.
Common Rules ensures air connectivity & traffic rights
In December 2018, the EU Commission issued a proposal for the regulation of common rules ensuring basic air connectivity with regard to the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union. The proposal became EU Regulation 2019/502 (OJ L 0851 27.03.2019) which entered into force on 27 March 2019, and it sets out a set of temporary measures governing air transport between EU and the UK (the “Regulation”). The provisions of the Regulation shall apply in the event of a no withdrawal agreement.
The Regulation is temporary and will cease to apply on the earlier of the following two dates (a) the date of an agreement between the EU and UK governing the provision of air transport enters into force, or is provisionally applied; or (b) 30 March 2020.
The Regulation provides for the continuity of traffic rights for UK air carriers (subject to conditions including restriction on any bilateral arrangements or agreements); co-operative marketing arrangements such as blocked-space or code-sharing; aircraft leasing arrangements; derogations for treatment of operating licences in view of ownership and control requirements, for the duration of the Regulation allowing additional time for agreement on long term solutions to be reached between the EU and the UK .
Furthermore, certificates and licences issued by the UK authorities and in force on Brexit day, shall be recognised as valid by EU member states for the purpose of the operation of air transport services by UK air carriers, provided that such certificates or licences were issued and rendered valid pursuant to and in conformity with, as a minimum, the relevant international standards established under the Chicago Convention.
The Regulation contains an equivalence of rights provisions which provides that the EU Commission shall monitor the rights granted by the UK to EU air carriers and the conditions of their exercise. The purpose of equivalence provisions is that the set of regulations and applicable conditions should be substantially the same for UK air carriers as EU air carriers and rights should be equivalent and reciprocal. In the event that the EU Commission determines that the rights are not in law or in fact, equivalent to those granted to the UK air carriers by the Regulation, then the EU Commission shall, without delay adopt implementing acts to restore equivalence in the form of establishing limits to allowable capacity for scheduled air transport services; require EU member states to refuse, suspend or revoke operating authorisations or impose financial duties or operational restrictions.
The provisions apply from the day following Brexit day, currently 1 November 2019, and shall not apply if a withdrawal agreement is concluded and enters into force prior to that date.
The remaining life expectancy of the Regulation is less than 6 months. Accordingly, it is important for aviation businesses in Ireland, England and across the EU to plan for a no-deal Brexit in particular in the areas of regulatory approvals and certification, licencing and authorisations for personnel and businesses whether air carriers, MRO or other technical service providers.
The exit process for the UK from the EU has and continues to take-up considerable time and energy amongst the governments and negotiating teams of the UK and the EU. The Regulation introduced immediately prior to the first Brexit date (31 March 2019) provides a measure of comfort and continuity pending the negotiation of a more comprehensive air transport agreement which will be required to address and preserve continuity of air transport services to, from and within the UK, deal with the harmonisation of security and safety measures, customs and preserve and maintain best industry standards, consumer rights and security for all users and stakeholders.
Given the complexity and scope of the negotiations, the need to avoid transport disruption, and concerns about possible reduction in service levels and passenger rights, it is and remains important that the negotiating parties recognise the importance of the task ahead and the short time currently provided for in the Regulation to achieve agreement.
The 2019 Regulations provides a small measure of space and time in advance of the substantive negotiations to follow later this year and we will continue to monitor developments impacting on this sector up to and following Brexit day.
For more information on the impact of Brexit on the aviation industry, contact a member of our Aviation, International Asset Finance team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.