Wednesday, October 20

The Brexit pact leaves an open door for Iberia to continue flying as it has been up to now | Economy

An Iberia plane.
An Iberia plane.Jordi Adrià

The agreement between the European Commission and the United Kingdom on Brexit leaves an open door for Iberia and Vueling, the IAG group’s Spanish-based airlines, to have hands free to operate in European airspace without any hindrance. The pact introduces an article that calls for modifying and, where appropriate, eliminating within a year the current ownership requirements that oblige airlines to have a majority of EU shareholders to maintain their community license and their current flight rights .

The text of the agreement, to which EL PAÍS has had access, dedicates the entire chapter two to the aviation sector and, in the 24 pages of which it consists, does not greatly modify the current regulations. In particular, it maintains the requirement that airlines are owned by more than 50% of Community shareholders to retain current licenses and flight rights within the EU as Community companies.

However, it introduces an article in which it calls on both parties – the European Commission and the United Kingdom – to reach an agreement within one year to reciprocally liberalize the control of the companies and the ownership requirements, in a manner that would be exempt from the shareholder limit of non-EU shareholders.

“The parties recognize the potential benefits of continued liberalization of ownership and control of their respective airlines. The parties agree to examine in the Specialized Committee on Air Transport options for the reciprocal liberalization of the ownership and control of their airlines within the 12 months following the entry into force of this agreement, and subsequently within the 12 months following the the receipt of a request from one of the parties. As a result of this examination, the parties may decide to amend this title ”, literally reads article 9 of the chapter dedicated to aviation.

Bilateral committee

In this way, once that bilateral air transport committee is constituted, it will be able to study any request to eliminate restrictions on airline capital, which would clear up all the doubts of Iberia and Vueling (and the rest of the IAG companies such as British Airways and Aer Lingus) in order to continue operating as before.

Both IAG and Iberia have always defended that they comply with this ownership requirement, but the truth is that they have a large shareholder base of UK funds and their largest shareholder is Qatar Airways, with 25%, which does not leave so much Of course, EU investors are the majority.

In fact, the Community Executive had doubts that Iberia would comply after Brexit with these demands for control and ownership, mostly Spanish, and asked the national authorities to clarify the situation, although it has not officially given the green light to any alternative plan.

Iberia and Vueling presented the ownership and control plans to the Spanish flight certificate supervisory authorities in April 2019. The Spanish Air Safety Agency (Aesa) and the Civil Aviation Authority, both dependent on the Ministry of Transport, gave the go-ahead to the Spanishness test before the summer of that year.

And the President of the Government himself, Pedro Sánchez, affirmed on December 11 that “there would be no problem for Iberia to operate in European airspace after the United Kingdom left the European Union” because “the problem is solved” .

If airlines considered European until now due to having a British majority stake remain unchanged, they will lose this European status with the UK’s exit from the club and, therefore, they would also automatically lose their intra-European license.

IAG even vetoed the entry of non-EU capital to ensure it complies with the EU requirement, a measure it lifted last January. In addition, 100% of the political rights in Iberia are in the hands of the Spanish company El Corte Inglés through the Garanair company.

The EU gave European airlines at risk of losing this status more time to restructure their shareholdings during the transitional period of the UK’s exit from the community club, but this deadline expires on December 31.

In practice, this means that airlines that are no longer predominantly European will not be able to operate flights within the European Union, such as routes between Madrid and Barcelona or between Madrid and Brussels, but they will be able to operate links between the United Kingdom and a destination in the EU.

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