With the European Union referendum campaign officially taking off in the United Kingdom, the topic of Brexit (the term coined for the potential withdrawal of the UK from the European Union) will certainly dominate conversations as June 23rd draws closer. Will the UK vote to stay or leave the European Union? Despite the uncertainty of the situation, if Brexit succeeds, the aviation industry in the UK will inevitably face tough implications.
The UK has enjoyed the freedom of an internal market since the 1990s, which allowed low-cost carriers to develop and grow considerably due to the deregulated pricing and capacity limits. Therefore, what would the UK’s next steps be if it was to Brexit?
Jeremy Robinson, a Partner at Watson Farley & Williams, a law firm whose specialities include transport and energy, suggested what impact a Brexit would have on the industry’s development.
“I would strongly bet on the UK negotiating continued access for aviation to the ECAA, even with a Brexit. The risk in doing that is being subject to continued EU law without influencing its creation, but I do not see an alternative.
“It is simply not conceivable to go from being a full member of the EU’s open aviation area with all the rights that come with it and with all the consumer benefits of easy travel, to taking the risk of having no rights to fly to EU Member States at all on day one after Brexit.
“It is scarcely more conceivable that the UK will instead have some form of restrictive bilateral air services agreements with the remaining EU Member States (negotiated – in a worst case scenario - perhaps individually and piecemeal rather than as a bloc) – turning the clock back a quarter of a century for UK consumers – as well as visitors from the EU.”
Obtaining access to ECAA would be essential to the retention of opportunities for both operators and consumers. Holding this access would still allow market openings between the UK, the EU and its neighbours.
This agreement already allows countries such as Norway, Iceland and Croatia equal access. Without this, the low-cost fare and other elements could be in jeopardy.
“A Brexit without access to ECAA would undermine airline competition on many routes, harming consumers, who would be faced with less choice and higher prices on some routes” explained Robinson.
“This is all without considering the contagion effect of a strong vote to leave: what if other EU Member States also decided to hold a referendum? Just when other regions of the world – Africa and the ASEAN states – are trying hard to create liberalised aviation markets, could we really go back into old-style protectionism within Europe?
“A true Brexit would be massively harmful to route development between the UK on the outside and the EU Member States unless the UK were to join the ECAA.”
This year, Jeremy Robinson will be taking part in the ‘What Europe Needs Is…’ Strategy Summit panel debate at Routes Europe in Kraków at 10:25 on April 24, 2016 and explained why he will be attending.
“Routes is not just a forum for airport-airline route development discussions; it is a hub for the exchange of ideas between all stakeholders and thought leaders in the industry. In that sense, it combines the commercial and strategic elements of aviation development. But for me, it is very valuable to be a part of that exchange of ideas,” he said.
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