Airlines start to deploy post-Brexit strategy

European holiday giant TUI is rumoured to be considering the sale of its German airline operation TUIfly to UK low cost carrier EasyJet which is hunting for a way to get around possible EU flying rights problems post-Brexit, according to Bloomberg.
The British carrier must protect its flying rights in Europe after Britain leaves the European Union, a market that represents around one third of its business.
Brexit will also have ramifications for other EU carriers. Currently EU rules dictate that foreign investors are only able to own up to 49 per cent of any airline based in a member state.
Britain’s departure from the EU therefore poses an issue for Irish low cost carrier Ryanair. Around 46 per cent of Ryanair shareholders are based in the US putting it below the threshold – although around 20 per cent of the remaining portion is British.
“Are they now treated as non-EU shareholders if there isn’t open skies? Ryanair CEO Michael O’Leary asked in an interview earlier this month.
As that article rightly pointed out, the shareholder question is likely to prove equally as problematic for easyJet, IAG and other companies.
US Department of Transportation director, officer of international aviation, Brian Hedberg told delegates at the World Routes Strategy Summit in Chengdu, China that it is not until negotiations begin between the UK and the EU over the break up that the impact will be fully understood.
“The Europeans and the UK are going to look at some significant challenges. (For instance) UK carriers are currently flying between points in Europe; what happens to those flights and the services they provide?” He also cited the issue of ownership will need to be resolved with UK airlines owning considerable chunks of European airlines.