16th Oct 2018 12:20
LONDON (Alliance News) - Anglo-Spanish airline International Consolidated Airlines Group SA could lose its EU operating licence in a no-deal Brexit scenario, according to the Financial Times.
Under EU law, IAG, which owns both British Airways and Spain's Iberia, must be more than 50% EU-owned in order to maintain its operating licence within the bloc. In the event of a hard Brexit, IAG's UK nationals will stop counting toward this percentage.
However, reducing its percentage of UK ownership could cause IAG to run afoul of US operating requirements on transatlantic routes.
Violeta Bulc, transport commissioner, was interviewed by the FT and told the newspaper than the airline has no reason to be caught out, as it has had ample warning.
"We've been asking everyone to take it seriously and to prepare for different scenarios," Bulc told the FT.
"If there is no deal [between the EU and UK], I don't need to point out which side the EU will be on," she added. "It's Spain that we will have in mind."
IAG also owns regional carrier Vueling in Spain and Aer Lingus in Ireland, which like Spain will remain part of the EU.
IAG Chief Executive Willie Walsh has previously dismissed fears around post-Brexit ownership, according to the newspaper.
"We have every confidence that the US and UK will sign a deal that is in everyone's interests. All parties have a shared interest in ensuring that existing rights continue under new bilateral arrangements. This allows airlines on both sides of the Atlantic to operate existing services and seek to develop new ones," IAG told the FT.
According to the Financial Times a majority of airlines, such as Ryanair Holdings PLC and easyJet PLC, have provisions enabling them to forcibly buy out non-EU investors to keep their licences.
However, the FT said that because IAG runs "the world's busiest long-haul route" with its flights from London to New York, any agreement between the US and UK would likely require the company to be majority-owned and controlled by UK parties.
https://www.ft.com/content/d7e6f5f2-cd3c-11e8-9fe5-24ad351828ab
Last Thursday, the UK Competition & Markets Authority announced that it will probe the transatlantic pact between IAG and American Airlines Group Inc in relation to this route.
Following an EU competition investigation in 2010, commitments were signed in relation to routes from London to New York, Chicago, Miami, Dallas, and Boston. These commitments are set to expire in 2020, making landing and take-off slots available to competitors.
The CMA said it had based its decision to review the deal on the fact that the European Commission may no longer be responsible for UK competition in 2020 once Brexit occurs.
Shares in IAG were up 0.8% at 587.40 pence on Tuesday.
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