BA Loses Cargo Cartel Appeal While EU Post Brexit Market Access Remains Unclear

The UK aviation scene, one of the world’s most busy, is still no way nearer to finding out what are the actual consequences for UK based carriers once the United Kingdom departs the European Union. British Airways also just lost an appeal in the EU courts.

Exaggeration or coming true very soon? Brexit forcing carriers to leave the UK on a large scale  - animation: LHR
Exaggeration or coming true very soon? Brexit forcing carriers to leave the UK on a large scale - animation: LHR

Cargo cartel appeal by BA is turned down
The European Union’s Court of Justice (ECJ) recently turned down an appeal by British Airways to rescind a €104 million fine on the carrier for alleged participation in the so called “air cargo cartel” between 1999 and 2006. This ruling by the ECJ not only related to British Airways, but also to ten other airlines, all of which were fined for what the court saw as illegal collusion for price fixing as well as agreeing on security and fuel surcharges. Total fines amounted to €776.5 million, of which BA has to carry €104 million.
British Airways appealed the ruling based on what they saw as case procedure irregularities, but this has now been finally turned down by the ECJ.

What future for UK carriers in the EU?
The above case concerning British Airways, seems rather insignificant considering what may come around the corner for UK-based airlines once the United Kingdom departs the European Community.
Time is running out if all parties are to reach a Brexit agreement before the deadline of March 2019. Basically, almost just a year away. The recent defeat in the British parliament for the UK Prime Minister, Theresa May, whereby the British parliament will have the right of “final say” on any agreement reached - gives hopes to some that this maybe a turnaround tactic and that the UK will remain.
Don’t bank on the above - as there are still many strong elements in the UK who want the break to go through.


Strict future operating restrictions?
According to a recent reports in the UK press, there seems to be a strong move by EU regulators not to do any kind of deal with the UK on traffic rights or change of EU aviation policy to benefit the UK, once the Brexit has been completed. This gives UK-based carriers already headaches for which there is presently no foreseen solution. It is highly unlikely however that the EU will close their airspace for UK registered carriers altogether. So far there is to-date only one UK registered cargo carrier which may have to “re-flag.” That is CargoLogicAir, the Volga-Dnepr daughter which is UK registered and based at London-Stansted Airport. Their aircraft presently also operate on routes through Frankfurt.
If no agreement is signed off by Brexit date, then officially the UK  government will have to revert to the old process of having to reach single bilateral agreements with all of the remaining 27 (if not more by then) EU member states. This would be heavy work for British Airways, easyJet and all other regional UK carriers who operate to the “continent.”

More or less back to the middle ages!
If the above were to come about then carriers such as easyJet would lose their present traffic rights to operate within the EU unless they also were able to re-flag in time. It seems easyJet has taken the initiative by already forming easyJet Vienna. It remains to be seen whether this is the final solution.
The present negotiations between the EU and the UK on reaching agreement on Brexit, somehow do not have the air traffic rights problem on their radars and the UK’s refusal (so far) to adopt EU laws even after a breakaway, leave them no chance to retain their present market access, whatever agreement may be in the pipeline.
Time to get moving before all run into really heavy turbulence.

John Mc Donagh

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