december 17

UK and USA reach post-Brexit open-skies deal

Aviation
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The UK and the USA have reached an open-skies deal that will maintain air links between the countries after the former leaves the EU.

Airlines from both countries will have the same level of access as they do under the EU-US open-skies agreement, says the UK transport secretary Chris Grayling. He calls the accord, which is one of nine the country has reached with countries around the world, an example of the UK and USA’s “special relationship”.

The UK-US market is the largest across the Atlantic, with its 9.69 million annual passengers representing 29% of all traffic between the USA and Europe in 2017, US Department of Transportation’s latest data shows. The next largest, between Germany and the USA, made up just 16% of transatlantic passengers.

“It’s critical that Britain maintains full access to international aviation markets so it can continue to develop its global trading links,” says Willie Walsh, chief executive of British Airways parent International Airlines Group, in a statement. “This agreement is a significant positive development which we welcome.”

The open-skies accord was expected by those close to the process. The DOT’s deputy assistant secretary of transportation for aviation and international affairs David Short said at a panel discussion on 27 November that few would be surprised if negotiators reached an agreement at meetings held in Washington DC today.

“The big achievement is to assure there will be no speedbump whatsoever when Britain leaves the EU,” he said.

Some feared that if the UK leaves the EU with no agreement, a so-called “hard Brexit”, in March 2019, air service between the UK and USA could revert to the countries’ previous bilateral agreement. Such a step back could have resulted in one US airline being booted from London Heathrow, which was limited to just two UK and two US carriers.

American Airlines and United Airlines were the two US carriers with rights to serve Heathrow prior to the EU-US open-skies agreement in 2008. Delta Air Lines moved its operations to the airport following the accord.

“Today’s announcement provides much needed certainty that when the UK exits the European Union there will be no disruption to air service for the travelling and shipping public,” says Nicholas Calio, president and chief executive of US industry body Airlines for America (A4A), adding that he applauds the agreement.

Atlanta-based Delta, which has a joint venture with and owns a 49% stake in Virgin Atlantic Airways, reiterates that the pact provides “certainty” to the market regardless of how the UK leaves the EU.

The UK will leave the EU at the end of 2020 under a deal reached by prime minister Theresa May and EU leaders on 25 November. A hard Brexit will occur if parliament does not approve the agreement, and the country will exit the bloc at the end of March 2019.

The UK does not provide any additional details on the substance of the open-skies agreement. However, Short said yesterday that a new accord could include “improvements”, like seventh-freedom cargo rights – for example, a US cargo carrier could operate a flight originating in the UK that goes to Germany – as well as overseas UK territories, like Anguilla, Bermuda and the British Virgin Islands.

BA carried 36.3% of traffic between the UK and USA in 2017, data shows. Combined with its joint venture partner American, the airlines carried more than 52% of passengers in the market. Virgin Atlantic and partner Delta carried 25.4% of traffic, and United 11.3%.

Neither the US Department of State, American nor United were immediately available to comment.

Updated with A4A statement

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