Sunday 15 September 2019

Irish airlines ask the EU for grace period on ownership rules

Ryanair and Aer Lingus parent IAG seek moratorium on enforcing rules which could force share buybacks - report

Majority of any domestic airline’s shares must be owned in member states. Stock picture
Majority of any domestic airline’s shares must be owned in member states. Stock picture
Gavin McLoughlin

Gavin McLoughlin

Ryanair, Aer Lingus parent IAG and EasyJet have asked the EU for a one-year moratorium on ownership rules that otherwise could force them to buy back shares held by British investors after Brexit.

EU rules state that the majority of any domestic airline's shares must be owned by member state nationals.

The rules have long blocked US and Middle Eastern buyers taking full control of European carriers.

Airline representatives met Sabine Weyand, deputy to EU chief negotiator Michel Barnier, to press their case, according to French financial newspaper 'La Tribune'.

A year's extension would give the companies more time to figure out the best solution to the issue. If after Brexit British nationals no longer count for the purposes of the rules, that could mean the airlines lose their European operating licences if only a minority of shareholders come from the remaining EU member states.

Ireland's aviation watchdog, Cathy Mannion, said that the Commission for Aviation Regulation has written to all the Irish airlines to remind them about the rules,

"This is very significant. We have 16 licenced air carriers in Ireland... and we've been in contact with all of them to make them aware of this point," Ms Mannion said.

"It's up to the airlines as to what it is they want to do. Some of them are not impacted at all and some of them will be... that's an important thing for the airlines to get sorted out."

IAG, led by Willie Walsh, has previously said that it is "confident that we will comply with the EU and the UK ownership and control rules post Brexit".

It did not comment on whether it had asked Ms Weyand for an extension.

The group, which alongside Aer Lingus includes British Airways, Iberia and Vueling, said it is confident that "a comprehensive air transport agreement between the EU and the UK will be reached".

"It's in the UK and EU's interests to have a fully liberalised aviation agreement. Aviation liberalisation has been a great success story across Europe, benefiting one billion customers each year and creating a huge number of jobs across the continent. Even if there is no Brexit deal, both the EU and UK have said they will put an agreement in place that allows flights to continue."

Ryanair and EasyJet did not respond to requests for comment. In Ryanair's most recent annual report, it said that as of July 19 this year, EU nationals (including Britons) owned at least 52.8pc of Ryanair shares.

The report said if it faced losing its EU licence, it is entitled to identify some shares as restricted shares and require that they be disposed to EU nationals.

Additional reporting Bloomberg

Irish Independent

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