Brexit aviation progress facing turbulence as France and Germany eye business opportunities

Rebecca Smith
Aviation bosses warned of 'vested interests' potentially influencing Brexit progress
Aviation bosses warned of 'vested interests' potentially influencing Brexit progress (Source: Getty)

The outgoing boss of London City Airport warned today of the need to be aware of "vested interests" from European countries that have the potential to disrupt progress on post-Brexit aviation agremeents.

London City's chief executive Declan Collier said that despite the overall focus on the benefits of retaining a positive relationship between the UK and Europe, "there are commercial interests that will be looking to see what they can do to improve their position".

He added:

There is significant competition between airlines based in the UK and airlines based in Europe, and we've got to be cognisant of that, we've got to be careful of that - that we don't get those vested interests over influencing the more important general picture, but they're there.

Speaking on a panel at the Airport Operators Association annual conference, the president and chief executive of Airlines for America, the trade body for US carriers, explained the US had encountered resistance from France and Germany when approaching policymakers in both the UK and EU in the wake of the June Brexit vote.

Nicholas Calio said the US had urged a two-step process, including a quick US-UK open skies agreement to maintain transatlantic connectivity, and a liberalised agreement for the UK and EU to ensure the flights between them are maintained.

"We got a little pushback in some European countries about us being on their ‘home territory,'" Calio said, adding that the two countries in particular saw "a business opportunity".

At present, Calio said one of the advantages the EU has in negotiation is that the EU27 states remain "remarkably unified", but this could look different "as we get to the brink" of talks.

Echoing comments made by transport secretary Chris Grayling yesterday, who cited the importance of UK passengers to Europe, Calio said 12m passengers holiday in Spain each year. "That's signficant to their economy; they can't go on without it, and that's replicated across the EU, so I think reality will come into play."

London City's Collier did though, say he was "incredibly worried about the level of complacency that appears to be drifting into our thinking" on Brexit progress regarding aviation.

"It's almost as if it'll be alright on the night," he added, saying that while there was a lot of goodwill on all sides, "wanting it to succeed isn't enough".

"I see no clear path, all I see is a huge degree of uncertainty facing the industry, and I think it's bad for the UK, and it's bad for the EU," Collier said.

Read more: Darling: Biggest Brexit threat is that we don't know where we're going

"This industry is too important globally and too important to the UK to operate on a brinkmanship approach," he warned.

Collier said that the aviation industry is "incredibly susceptible to consumer sentiment", and should that dip, it could easily lead to a domino effect of consequences.

"All you need to do is think about people considering the pound is dropping in value, the cost of foreign holidays is going up, they're not sure whether they can book their flights, for them to say, 'Well, I'm going to hold off, I'm not going to book my flights.'"

"The response from the aviation sector, the airlines, is going to be to reduce capacity. As capacity reduces there’ll be a scramble to get passengers in, yield will fall - be pressurised, and inevitably somebody is going to suffer and we’re going to see some failures," Collier said.

Some airline bosses have expressed confidence in the outcome of discussions, with IAG's Willie Walsh saying yesterday: "The prospect of there being no flying between the UK and Europe, I don’t agree with at all, because it goes well beyond that. I think this would bring the whole of Europe to a standstill. It’s not just about isolating the UK."

But Calio said today that airlines had to refute concerns about the state of Brexit negotiations. "We can't have panic taking over passengers and impacting demand," he said.

Read more: Grayling says 'rapid progress' is being made on post-Brexit aviation deals

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