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Brexit and aviation: Impact on Transatlantic services

04.08.2016 Aviation

Gillie Belsham

Gillie Belsham Global Head of Aviation, Partner

The “Open Skies” agreement of 2007 between the EU and the USA permits carriers from both parties to operate air services between any point in the USA to any point in the EU (and vice versa). When the UK withdraws from the EU, British carriers will no longer benefit from the Open Skies agreement, which is likely to have far-reaching effects. After the UK exit, services between the USA and the UK will be subject to whatever bilateral air services agreement exists between the two countries. Access to Heathrow was a particular demand by the US during the Open Skies negotiations and it remains to be seen how the USA and the UK will regulate reciprocal rights for their carriers after Brexit.

Airlines from the EU27 Member States will continue to enjoy the status of Community Carriers and therefore the Open Skies agreement will continue to offer them access to US points and the same in reverse for US carriers.

Impact on UK Aviation elations with other countries

The EU has bilateral air agreements with a number of other countries, including Canada and is currently negotiating with Brazil, New Zealand, and Australia. Forthcoming negotiations will commence with Turkey, Qatar, the UAE, and the ASEAN bloc.

The UK will not be party to these negotiations after Brexit and will have to negotiate its own bilateral agreements.

However, short term practical solutions may be reached by the UK and third countries outside the EU adopting the terms of old bilateral agreements or even the terms of an EU bloc agreement in so far as they relate to the two states in question, and have survived any subsequent EU arrangements. The rights and privileges granted by bilateral agreements (or air service agreements as they are known) are necessarily of a reciprocal nature and both sides may want and need them to immediately continue without detrimental change. Thus, whilst renegotiations will take time and effort, the reality for UK carriers is not as bad as it might first appear as regards third countries which may have agreements that could be revived. (In the concluding section regarding the status of Switzerland and the EU – see below – this issue is addressed as regards the UK-Swiss bilateral agreement of 1950 which has never been formally repealed).

Finally, it should be borne in mind that the UK’s membership of the World Trade Organisation (WTO) would not have an impact on air services. Transport services are currently excluded from the scope of the WTO General Agreement on Trade in Services and there is no current prospect for this to change. As a result it will not be possible for the UK to negotiate aviation agreements via the WTO.

Article authors:

Gillie Belsham

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