Brexit fallout for Single Sky remains unclear

The industry fallout caused by the Brexit vote of the United Kingdom to leave the European Union will take some time to become clear but what is emerging is a determination by the architects of the Single European Sky to deliver the vision of ATM modernisation for the region, writes Aimée Turner.
UK air navigation services provider NATS has played a pivotal role in the region’s efforts to boost the competitiveness of its aviation industry although some observers fear that the United Kingdom could now lose its place at the negotiating table in shaping future regulation.
NATS is certainly keen to play down the potential impact on the Single European Sky project and on its participation within the technical SESAR (Single European Sky Air Traffic Management Research) programme, both of which seek to increase safety, efficiency and capacity while reducing delays within European airspace.
“The impact of the UK’s vote to leave the EU will not in the short term change anything,” NATS told Air Traffic Management. “We will still have to comply with the requirements of the current regulatory targets as part of the UK-Ireland Functional Airspace Block (FAB); we will continue to upgrade our technologies during the 2015-2019 regulatory period, which will enable us to deploy concepts developed through SESAR that will benefit our customers and passengers. Neither will it change the need for airspace modernisation in the UK.”
The UK’s decision to leave the EU could still lead to uncertainty around many of the agreements and regulations that underpin Single European Sky legislation.
“Longer term, any potential impact of the decision on NATS will depend to a large extent on the type of new relationship that is forged between the UK and the EU and how aviation will be treated within this,” said NATS. “If the UK continues to comply with the requirements of Single European Sky legislation, we would not anticipate significant change to NATS’ future activities, although it may be the case that the UK is less able to influence the future direction of SES legislation.”
International airline industry group IATA has warned that if no formal arrangement existed in future in terms of post-Brexit cooperation with the EU, there could be a ‘full divorce and a clean break’ in aviation terms. “Any bilateral air services arrangements between the UK and the EU would be strictly limited to market access,” it warned. “This option would secure maximum policy freedom for UK policymakers with the only supranational influence coming through the multilateral Chicago Convention framework of ICAO. At the same time, the UK could be excluded from European initiatives such as the Single European Sky which it has long promoted and championed.”
One highly placed source ventured that NATS may be freed from complying with stringent European ATM performance targets although a lack of adherence here may place a question mark over its access to European funding for its national SESAR programme through the Connecting Europe Facility. “It will all depend on the terms of a future exit agreement but this could take two years to resolve,” he said.
NATS conceded that there may be implications for its contribution within the SESAR programme should the UK Government choose to seek an alternative to its current commitment to the Single European Sky, but noted that it was not possible to assess what these might be at this stage.
Another issue for NATS is arguably its business in Europe and what measures may apply in future as this could significantly affect its trading. In recent years EU regulations have opened up the flight market with aviation regulations including Article 119 which guarantees EU airlines the right to operate point to point air routes within the EU, in addition to the Open Skies agreements which allow EU countries to act as one when agreeing rules with other countries.
The extent to which operating from outside the EU would impact costs for travellers and therefore traffic levels would depend largely on the agreements the UK Government adopts and the ease with which the transition to the new arrangements takes place.
NATS here conceded that economic uncertainty and market volatility that may result from the vote to leave could affect the demand for air travel and therefore its future revenue although it insisted that any changes here would be mitigated by traffic volume risk sharing arrangements.
IATA here warned that prolonged uncertainty will influence both the magnitude and persistence of any economic impact: “Preliminary estimates suggest that the number
of UK air passengers could be 5 per cent lower by 2020, driven by the expected downturn in economic activity and the fall in the sterling exchange rate.”
Industry commentator Andrew Charlton of Aviation Advocacy also questioned what would become of those agreements signed by the Europeans on behalf of all of the members of the European Union – notably the EU-US Open Skies agreement, adding that the mandate that the Commission has just secured to negotiate with the United Arab Emirates, will now “likely not include Britain”. “That weakens both the European case and the British case too,” said Charlton.
One European ANSP chief told Air Traffic Management that he believed that NATS would continue to participate in the Single European Sky and SESAR programmes. “It is too early to draw any conclusions, the UK’s exit from the EU may take several years, and during this time a lot can change. But Norway has been part of SESAR and they have done it with their own money. The key issue is that NATS will still be physically in Europe and very much involved to what we are doing here.”
He pointed out that NATS and those UK companies participating in the SESAR programme will remain intent on maintaining and growing market share although funding that growth could become an issue.
“NATS’ system development is tied to the Single European Sky and SESAR, so it will take perhaps a decade before they will really take a separate course from EU developments – if they will at all. They are also part of Eurocontrol where they will remain,” he said.
He also noted the leading role NATS plays within the European ANSP alliance Borealis: “I am definitely troubled on this issue. We have applied for a lot of support money from the EU to develop Borealis Free Route Airspace and NATS probably won’t get that funding now. I hope that we will continue doing things together but there is always this political element that has its own logic so I dare not to predict,” he said.
A further issue is the political spat between Spain and the UK over the vexed issue of Gibraltar which has hobbled fresh SES2+ legislative measures to accelerate the delivery of the Single European Sky objectives.
EU transport commissioner Violeta Bulc told an aviation summit earlier this year that completing the Single European Sky remained central to guaranteeing the sustainable future of the industry both domestically within the EU in addition to its performance in international markets. “Delivering on the SES 2+ regulation in 2016 is vital,” she said. “This is the single biggest issue to be resolved in making our EU aviation market more efficient and competitive.”
In the wake of the Leave vote, theoretically at least, the problem of Gibraltar would be solved since there would no longer be any need for a specific clause as advocated by Spain.