Brexit is not the “be-all and end-all” for UK business aviation and could present opportunities for bilateral agreements with key aviation markets globally, according to Aoife O’Sullivan, partner, The Air Law Firm.
Speaking at today’s BBGA Brexit webinar, O’Sullivan said: “In terms of aviation, there is contingency legislation in place which allows for continuity in safety and connectivity. But it was superseded by the Withdrawal Act so we need it re-enacted on a No Deal. Frankly for everyones benefit, not just the UK. This is to give assurances to both UK and European operators that their licences will remain valid after 31st December. If we can’t negotiate a bilateral agreement with Europe, the UK will become a third country to Europe and European counterparts to the UK.”
However, O’Sullivan pointed out that it is in the interests of Europe, as well as the UK, to agree a bilateral agreement which will allow for a continuation in safety standards and connectivity. And even if an agreement with Europe remains unnegotiated there are bilateral agreements which can be negotiated with Latin America, Asia and Africa – on top of the Open Skies agreement already decided with the US.
The UK’s role in EASA will inevitably change, noted O’Sullivan, which she said is unfortunate given the amount of investment and management the UK has put into the organisation over the course of its membership. There is a chance the UK will assume a Swiss position, whereby it is recognised by the EASA and can operate within its framework but has no role in its management.
In terms of opportunities, there are many according to the aviation lawyer: “The UK is now a new global market and it intends to move towards an export-based economy. There are opportunities for comprehensive air transport agreements with China, the US, Asia and Latin America. There is the possibility of addressing skills gaps through the use of UK training facilities. Also, the CAA would like to take a more relaxed approach to ownership and control, which opens up a whole body of investors who are now able to come into the market.”
Adrian Jones, director, Martyn Fiddler Aviation, agreed that the UK has the potential to become a centre for aviation post-Brexit. Speaking from a taxation perspective, Jones said there is still the chance of a “Panacea” agreement, by which any aircraft imported into Europe or the UK can remain imported through both jurisdictions as is currently legislation. However, it is also possible that those importing an aircraft are left with binary choice between Europe and the UK.
“European tax negotiators are pushing for an exception on this taxation,” said Jones. “However, no agreement means the removal of free circulation for UK aircraft and European aircraft entering the UK. Which will require operators to apply for temporary admission to the EU, which lasts six months. This will work for some operators who are flying into Europe and back out again but does not allow chartering from one destination to another within Europe itself.”