Government to prioritise market access as it moves to dispel cloud of uncertainty hanging over airlines post-Brexit vote

 
Rebecca Smith
David Davis chaired a meeting with senior airline industry representatives to discuss Brexit
David Davis chaired a meeting with senior airline industry representatives to discuss Brexit (Source: Getty)

The government has moved to reassure the airline industry over market access after the Brexit vote, saying it remained a priority.

It wants to make sure the UK has "liberal access to European aviation markets".

Brexit secretary David Davis, transport secretary Chris Grayling and Tim Alderslade, the chief executive of Airlines UK, released a joint statement following a roundtable this morning to discuss possible opportunities - and concerns - in the wake of the Brexit vote.

Davis chaired the roundtable with senior figures from the aviation industry at City Airport.

Read more: The airline industry wants reassurance over Brexit negotiations

"Market access remains a top priority, and we want to make sure we have liberal access to European aviation markets," they said in a statement.

We are clear that Brexit provides greater freedom to seek new agreements between the UK and some third countries.

This includes looking at possible bilateral agreements to strengthen economic and cultural ties even further with countries such as the US and Canada.

Britain has the largest aviation network in Europe, as well as the third largest in the world and has direct connections to over 370 international destinations. That's more than any other EU country.

Airlines want to know if they will continue to benefit from the Open Skies agreement, the pan-EU single market for aviation.

Grayling, Davis and Alderslade said they will "work closely together" to ensure the aviation industry "continues to be a major success story for the UK economy" and will assess what risks exist.

They also said it was important to "give as much early certainty" to the sector as possible, particularly given the long lead in times associated with developing new routes.

Dr Volodymyr Bilotkach, aviation expert and lecturer in economics at Newcastle University, said it was crucial the government takes the airline industry's concerns seriously.

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"Without access to the Open Skies scheme, the UK may have to return to a situation of bilateral air service agreements, meaning airlines will only be allowed to fly from or to countries in which they are registered," he said. "Unless they create new subsidiary companies, Ryanair would only be allowed to fly between the UK and Ireland, while easyJet would be limited to flying via the UK."

Members of Airlines UK, the association of UK airlines, include British Airways, easyJet, Thomas Cook, Monarch, Jet2 and Flybe. And the industry has been keen to get reassurance on preserving the single aviation market.

The chief executive of British Airways owner International Airlines Group (IAG) Willie Walsh recently encouraged new US President Donald Trump to support a new US-UK Open Skies agreement modelled on the existing US-EU one.

And Ryanair boss Michael O'Leary has been vocal in warning that losing access to the single aviation market will raise airfares and cause a slump in profits, meaning airlines would likely move away from the UK market.

As for easyJet: it has an operating licence in the UK, but relies on intra-European flights for 40 per cent of its revenues. It reports its full-year results tomorrow, which are expected to be pretty tough going; the airline has already warned that the fall in the pound would be a £90m profit hit for it to cope with.

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