Traffic rights will be one of the biggest issues facing the aviation industry post-Brexit, and will potentially impact airlines, airports and other industry participants both in the UK and also overseas. The EU is a liberalised aviation market, meaning that any airline owned and controlled by nationals of EU Member States is free to operate anywhere within the EU without restrictions on capacity, frequency or pricing. Additionally, EU carriers are able to take advantage of the traffic rights contained in the many air services agreements that the EU has negotiated on behalf of all Member States with non-EU countries. This includes, most significantly, the EU-US open skies agreement which enables airlines from the EU and US to fly between the EU and US.
Without membership of the EU, the UK will have to find other ways of obtaining these European and overseas traffic rights for UK owned and controlled airlines. There are several ways in which these rights might be obtained. One option for access to the EU market would be for the UK to join the European Common Aviation Area (ECAA), which extends the liberalised aviation market and EU aviation laws beyond the EU Member States to other European countries, such as Norway. Another option would be for the UK to negotiate a bilateral aviation agreement with the EU, as Switzerland has done. For traffic rights to non-EU markets, the UK could seek to become a party to the EU’s existing air services agreements, which Norway has done for the EU-US open skies agreement. Alternatively, the UK could seek to negotiate its own bilateral air services agreements with non-EU countries. In its White Paper the UK acknowledges these issues and indicates its expectation that all sides will want to support affordable and accessible air transport for all European citizens, as well as maintaining and developing connectivity. The UK Government commits to seeking bilateral arrangements with the US, to replace UK participation in the EU-US open skies agreement.
However, regardless of the approach that is taken by the UK Government, there is no guarantee that UK owned and controlled airlines will enjoy the same traffic rights and benefits as EU-owned airlines both within the EU and in other jurisdictions. This could potentially result in UK airlines looking to base themselves elsewhere in Europe, in a similar manner to Norwegian Airlines which recently moved its headquarters from Norway to Ireland to take advantage of EU membership. This could in turn have a broader impact on airports and the aviation industry in the UK. For example, easyJet recently announced that it is setting up another airline based in continental Europe which would operate within the EU post-Brexit under existing EU traffic rights. Its current UK based airline will become a subsidiary to the new EU airline. easyJet has stated that it will, nonetheless, continue to maintain its current headquarters in the UK.