With no deal made yet with the EU, many airlines are finding that they soon might not have the right to operate in or out of the UK.
Airlines like Easyjet have applied for an EU aviation certificate, whilst Ryanair has applied for a UK aviation certificate. If Brexit is hard without a deal, then these airlines will transfer their fleets to the correct license to continue operating.
“If the Withdrawal Agreement is not ratified, air traffic between the EU and the United Kingdom will be interrupted. As of the withdrawal date, airline companies of majority non-EU capital will not be allowed to operate in intra-EU flights or domestic flights within the EU.”Advertisement
But there is one airline that thought they were safe in the EU, who is now finding out they are actually on shakey ground and might be barred from EU airspace; IAG airline Iberia.
Why is Iberia in trouble with the EU?
The problem with Iberia is that it is owned by IAG (International Airlines Group), who also own British Airways. Because IAG might be considered a UK company, it is now up to Iberia to prove that they are Spanish to maintain their right to operate in the EU.
However, the EU is rather lenient with companies like these, and if there is no deal ratified before the UK leaves the EU (if they do at all) they have two proposals. The first is to allow them to operate for 9 months on their existing certificate, and secondly, to let them fly from the UK to EU cities for 12 months. This does create a problem, however, as they won’t be able to fly within Spain on domestic routes.
“IAG is a Spanish company that brings together many operators, most of them are in European markets and the only one in the UK is British Airways” – Luis Gallego, president of Iberia
How do Iberia and IAG prove they are European?
Essentially, IAG will need to show authorities that they are actually a European firm and have every right to operate in the EU. They can do this by showing the following items:
- At least 51% of the company being owned by European shareholders (over 50% of IAG shares are held in the UK, which is the main sticking point of this discussion).
- Headquarters based in Europe (IAG is located in Spain)
- Shares are traded in EU currency (which they are)
If IAG can’t convince EU authorities that they are European, they will have to invoke special bylaws in their charter to move their UK shares over to EU control, satisfying the one requirement.
What do you think? Are Iberia and IAG a European or UK company?