News

Brexit – the potential impact on the aviation industry

Nick Kelly

Following the UK’s “yes” vote to leave the European Union (“EU”) after four and a half decades, many of the consequences of Brexit are still unknown; indeed, there is much speculation within the aviation industry about how Brexit may affect those working in and using the sector. Brexit will mean leaving Europe’s “Open Skies” system, which may force the UK into new bilateral agreement negotiations with the EU to allow flights to fly to and from Europe. A potentially complicated and drawn out procedure.

Disruption

UK and Isle of Man based aircraft could potentially face severe restrictions on European flights immediately if there were to be a “hard” Brexit according to the European Commission. We understand airline representatives have been told that, under a transitional deal, UK aircraft would only be able to operate direct flights, between the UK and the EU. This for example, would affect any UK based aircraft flying between destinations within the EU.

Plans

It is difficult to make plans while so much is still unknown. Those who require certainty on business travel arrangements and frequently fly within the EU may look now to re-register their aircraft and those who regularly fly within the EU and to and from the UK, may need to consider the possibility of facing the expense of running two aircraft.

Priorities

The British airline industry needs to set and layout their priorities quickly; market access as to who can fly where is arguably the most important issue to address first of all. There also needs to be clarification on what the foreign ownership restrictions to the airlines might be in practice.

Problems

There may be issues for the private aviation sector by seeing the need to deal with areas that are even more complex, such as recruitment and retention of crew, and the complexities of cabotage rights [the right of an airline registered in one country to operate domestically in another country].

Conclusion

There is a lot of work to be done within Government and the aviation sector to ensure that we continue to have the same amount of freedom we have become accustomed to over the last few decades.

Meanwhile, there will continue to be a lot of uncertainty surrounding the aviation industry as a whole and unfortunately, there is no escaping the underlying anxiety about the many unresolved issues swirling around the UK’s impending exit of the EU and how it will affect the UK in the long-term. 

It is difficult to imagine a solution will not be found. But what shape it will take and how long before it is reached remains up in the air.

Throughout all this however remains the Isle of Man Aircraft Registry. Where a business requires flight operations within the UK and the EU, they may now consider separate aircraft. In this event, the Island should remain a good choice for those looking for an aircraft registry with access to UK skies.

For further information about how Peregrine can help you with registering your aircraft and holding structures, please contact Nick Kelly on +44 (0) 1624 626586 or email him at nkelly@burleigh.co.im.

Peregrine Corporate Services Limited is licensed by the Isle of Man Financial Services Authority.