Low-cost airlines struggle to regulate their structure after Brexit

As the clock is ticking down towards March 2019 – low cost airlines are gritting one’s teeth before the final date of Brexit, fearing the future of the airline industry in Europe. On 19th March the UK and EU have agreed on a “large part” of the agreement that guarantees free-movement of people during the transitional period that will last between March 2019 and December 2020. This assurance gives the airlines some additional time to operate without disruption, however it doesn’t provide them certain rights after the UK’s withdrawal.

The Open Skies agreement that came into force in 2007 allows EU airlines, even those based in the UK, to operate in each other’s countries. The regulations might change soon and become a barrier that cannot be overcome for airlines in the UK.

The Chief Executive Officer of Ryanair Michael O’Leary told the European Parliament that they might have to suspend all Ryanair flights for months after the United Kingdom leaves the European Union as a result of no further progress on any Brexit deal that might potentially stop low-cost airlines from operating between the UK and other European countries. It would certainly cause a huge disruption for international passengers and those who legally work in the UK, despite their different nationality. Those people have already been assured about their rights after Brexit which at the moment guarantee them a stay if they have been legally living in the UK for the past 5 years.

“In the document published in February 2017r (White Paper) The UK Government assured that everyone living in UK for 5 years or more has a right resident status (subject to the conditions laid down in the Treaties and the measures adopted to apply them). According to the information from December 2016, over 12 months, 37.600 people have obtained the status of permanent resident. Since the Brexit’ referendum the numbers of applications for resident status increased about 10%” says Katarzyna Krause, Head of Political Section at Polish embassy in London.

Despite the favourable benefits and soft solutions of Brexit for EU residents, there are still many regulations to be discussed. Low-cost airlines such as: Wizzair, EasyJet and Ryanair have not yet been provided with the regulations and legal issue to be able to plan their future.

Every next day brings us closer to the Brexit deadline, leaving the airlines with many unanswered questions about their future and passengers rights. The assurance of legally stay for foreigners is a certainly great news for those who already settled down in the UK, however it is not certain how they are going to be transferred from point A (foreigner’s home country) to point B (the UK) and opposite, as the air regulations and legal issue are still on-going.

It is not only about the permission to operate between the UK and European countries, it’s also about the ticket prices, as the dropping pound will certainly affect low-cost airlines and force them to lower the prices because otherwise airlines would not have enough passengers to operate certain flight routes. Thus, it becomes not worthwhile for the companies to perform flights.

Roxani Athousaki, lecturer in Aviation at Coventry University told iCov that the possibility of drop in number of passengers after Brexit lies under what kind of aviation agreement UK will have with the EU.  How easy will it be for the UK citizens to visit EU destinations and vice versa?  If we are to enjoy a similar arrangement as the one we have today then I don’t believe we will see a difference in the traffic flow.  In any other case, there is going to be a disruption and that might affect negatively passenger numbers.

Also, She is afraid the problem is more complex than the element of the dropping pound.  LCCs do not have loyalty over unprofitable destinations and therefore anything that will be considered as high risk will be resumed.    The main problem currently lies with the regulatory framework that exists between United Kingdom and the EU countries and whether UK registered airlines will have access to Singe European Market or the EU registered airlines will have access to the UK Market (International and Domestic).

These questions are not likely to be answered soon, as the procedure of Brexit has already been delayed which, means not everything goes as planned and it’s not easy to establish all regulations within a short period of time. Airlines believe the future’s regulations will be as soft as regulations allowing foreigners to stay in UK if they have been living in the country for 5 years so far.

Michal Wojtczak

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