Could Britons Have to Sell Their Stakes in British Airways for the Airline to Survive?

British Airways has been the favored instrument of the UK government, the remaining instrument reminiscent of empire, stretching beyond its borders around the world and in many cases disproportionately to former colonial destinations.

Yet British Airways could be forced to make the radical move of becoming very un-British to survive. In fact according to the Financial Times (gated), British Airways might have to become majority non-British owned if it wants to maintain access to European markets.


London Heathrow Terminal 5

According to a (presumably intentionally) leaked presentation, “All rights, obligations and benefits derived cease. No traffic rights — end of market access; ownership & control rules — third country restrictions kick in; end of mutual recognition of certificates; end of participation in European Aviation Safety Agency (EASA).”

With Brexit pending there’s no time (and the EU is unwilling to negotiate) to create UK aviation deals. The EU position is that old bilateral treaties that the UK was a party to are not revived by Brexit and the UK would have to negotiate country-by-country.


London Heathrow Terminal 5

So the UK either needs to sign up as a member of the European Common Aviation Area, which is a humiliating move for Britain whose whole Brexit idea is to remove itself from European governance, or it is outside Europe with no aviation treaties giving its airlines access to European markets. Signing up for the Common Aviation Area would subject the UK to EU law and court decisions with respect to air travel.

And it’s not just British Airways, owned by IAG, which would need to be majority owned and controlled by European citizens and not British citizens but other UK-based airlines as well. That’s because EU law says that holding an EU operating certificate is only permitted for EU-owned carriers. And without that certificate airlines cannot operate flights within the common aviation area. This would mean ceding British operating certificates.


British Airways Business Class

Put another way, the EU is taking a hard position on British aviation as one of the most public ways it can appear to show strength, not just to the UK of course but to any other country that would consider exiting the union.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Most Britons are like the husband who threatens to leave his wife, and then has second thoughts when his self-announced due date is coming up. They’ll either back out of it or put a sunset clause of 5-10 years and negotiate as much access as they can. More than one EU “partner” is taking great delight in seeing the British squirm. The real issue will be when the Scottish try to get out of the UK again and join the EU.

  2. The EU is not “taking a hard position”. All of these laws were in place, known and supported by Britain prior to Brexit…
    This is not the EU’s problem to solve…

  3. The problem with bullies is that sooner or later they get their come-uppance.

    This was leaked by the EU as part of a long series of leaks since it prefers that tactic of negotiation – similar to the way in which it had treated other nations (remember Greece?)

    But BA has a bigger problem than others since it owns Iberia, Vueliing and Aer Lingus through IAG. And, with IAG being a listed company it cannot control its shareholder base.

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