Sunday 20 January 2019

All change at Holyhead if no deal is landed

Air passengers on both sides of the Irish Sea would lose out should the UK crash out of the European Union, writes Colm McCarthy

It seems to be forgotten, especially in the United Kingdom, that the ready availability of cheap and frequent air travel in Europe is an
achievement, and a fairly recent one, of European Union policy.
It seems to be forgotten, especially in the United Kingdom, that the ready availability of cheap and frequent air travel in Europe is an achievement, and a fairly recent one, of European Union policy.
Colm McCarthy

Colm McCarthy

Early in his premiership David Cameron despatched the Royal Air Force to enforce a no-fly zone over Libya, helping to topple the dictator Muammar Gaddafi. Things ended badly - the good guys lost the ensuing civil war. A subsequent Cameron brainwave, the 2016 Brexit referendum, is now threatening another no-fly zone, this time over the United Kingdom itself and without scrambling the RAF on this occasion. A no-deal Brexit could mean wholesale disruption to air travel and major costs for UK airlines and airports.

Air travel is important all over Europe but more so in Britain and Ireland than in the continental countries. Islands simply cannot offer the range of convenient surface alternatives. London is closer to Liverpool than Brussels, but Liverpudlians take no planes to London: there are no flights. Dublin is closer to Manchester than it is to Cork. People fly between Dublin and Manchester - there are 10 daily return flights. There are no Cork-Dublin flights: people drive, take the bus or train, as they do for a large portion of trips in continental Europe. Accordingly Brexit-induced disruption to air travel is a bigger issue for Britain and Ireland than it is for most continental European countries - the only exceptions are the Mediterranean sun destinations.

It seems to be forgotten, especially in the United Kingdom, that the ready availability of cheap and frequent air travel in Europe is an achievement, and a fairly recent one, of European Union policy. Until about 30 years ago passenger travel between Ireland and the British cities, and between Britain and nearby France, Belgium and the Netherlands, was by boat and train for all but the better off. Each country had its own national airline and they carved up the market through highly restrictive bilateral air traffic agreements. There was no Ryanair, no easyJet and the alternative to unaffordable airfares for Irish people was a rainy date with a midnight train at Holyhead. Dublin to London took 11 hours, London to Paris seven.

The European Union promoted a series of liberalising reforms from 1986 onwards, culminating in the current open-skies regime. There is free entry to all European air transport markets for all European airlines, as well as open skies between the EU and several more distant countries including the United States. If a Spanish airline wished to fly from Dublin to any destination in the EU (plus a few other non-EU neighbours) it is free to do so: this freedom extends to several long-distance destinations too - that's how Norwegian gets to fly from Irish and British airports to the USA. One result is that Europe's biggest airlines as measured by passenger numbers, including Ryanair, easyJet, Wizz and Norwegian, are airlines which did not even exist until the EU liberalisation programme got under way.

The old system of bilateral air service agreements, negotiated pairwise between the different countries, restricted entry to the industry, curtailed capacity, permitted cartelised high fares and sustained a host of inefficient national airlines. Several have gone bust and disappeared, including Sabena in Belgium, Malev in Hungary and Olympic in Greece. Alitalia is the current favourite to expand the list. But British Airways and Aer Lingus, now in common ownership, survived and are prospering in the new market, despite (or perhaps because of) the successful new entrants in their island markets.

The EU has also been pursuing rationalisation and integration of air traffic control in Europe. And a special organisation called the European Aviation Safety Agency was established in 2002 which has centralised some key functions including certification of airfields, aircraft, pilots and maintenance facilities. These it oversees in tandem with the national aviation regulatory bodies.

On March 29, next year the United Kingdom falls out of all of these arrangements, of which ironically the UK was an enthusiastic proponent, unless there is a transition deal or some other last-minute fix. During the 2016 referendum campaign Ryanair's Michael O'Leary took flak from Brexiteers for his warnings that UK passengers' ready access to cheap and frequent flights around the continent was under threat. In the last few weeks the UK government has finally acknowledged that there is indeed a serious problem for post-Brexit air travel unless solutions are found. Cue headlines about EU 'bullying' and attacks on the Taoiseach, for reiterating concerns expressed publicly by UK aviation leaders, in the pro-Brexit tabloids.

So how serious is the prospect of beach holidays for Londoners in the Outer Hebrides, and could Irish travellers be due to rediscover Holyhead? The risk of a no-deal Brexit, never zero, seems to have risen in recent weeks. Last Thursday, in Brussels Michel Barnier, the EU's principal negotiator, politely rejected some of the proposals from Mrs May's Chequers White Paper. A withdrawal agreement is not yet assured and the two sides are far apart on the political declaration, due in October, on future trade which is also needed to secure the 21-month transition period.

No agreement means a crash-out next March. The most extreme cases being war-gamed in the aviation industry include the closure of airspace to UK-originating flights and even the withdrawal of certification from UK airports. It is tempting to dismiss these outcomes as so insane that even Brexiteer politicians would not entertain them. But the Brexit process to date has included so much delusional thinking and so little careful planning that ridiculous outcomes could happen by accident.

The most serious threat is that the UK, a third country just eight months from now, will struggle to secure substitute arrangements for the relationship with the EU's liberalised aviation market which airlines and passengers have taken for granted. The transition period post-Brexit, expected to last until the end of 2020,

would provide time for the negotiation of new bilateral air service agreements with each European country and with more distant places currently served under common EU deals. But without a withdrawal agreement and hence no transition period the time is already short even for stopgap arrangements. Some airlines are prudently including get-out clauses in advance tickets for April 2019 onwards, since the flights may not take place through no fault of the airlines.

The cheerleaders for Brexit include an element who chant "no deal is better than a bad deal" in opposition to any retreat from Mrs May's chosen red lines. The aviation industry illustrates perfectly the depth of their misunderstanding. No deal does not mean, as it often does in ordinary bargaining, a return to the previous set-up. The UK ceases to be a part of the European systems of air traffic control, aviation safety and open skies. It is impossible, without a politically unimaginable capitulation to a purely nominal Brexit, to recreate the current advantages. If the deal agreed is Canada-style, a free trade agreement which leaves the UK outside the single market, some of the continental countries will bargain hard about traffic rights between the UK and the EU-27. Their national champion airlines feel nostalgic about the good old days of protection and politicised allocation

of routes, as do their US counterparts, and will seek a way to screw the Brits. For aviation there may be no good deals: but no deal is a potential disaster.

Sunday Independent

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