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15th of December 2018

Economy



UK and US agree post-Brexit flights deal

The UK and US have agreed an "open skies" deal for post-Brexit flights, Transport Secretary Chris Grayling has said.

The arrangement means airlines would continue to fly from the UK to the US after Brexit, the Department for Transport (DfT) said.

Flights between the countries operate under the US-EU open skies treaty.

The deal with the US is one of nine bilateral air services arrangements secured by the UK to replace it.

The others are with Albania, Georgia, Iceland, Israel, Kosovo, Montenegro, Morocco and Switzerland.

Discussions with Canada are at an "advanced stage", according to the DfT.

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Mr Grayling said transatlantic flights have helped bring the UK and US "even closer together, strengthening our ties and boosting our economies".

The Brexit campaigner went on: "This new arrangement and those concluded with eight other countries around the world are proof that the UK will continue to be a major player on the world stage after we leave the EU."

'Positive development'

Under the deal, EU majority-owned airlines that are operating between the UK and US will be able to continue to fly existing routes as long as they remain owned and controlled by EU/EEA nationals or UK nationals.

But any airline that is not owned and controlled by UK nationals and wants to start offering transatlantic routes after Brexit would need to seek a waiver from the US government.

That technicality aside, aviation consultant John Strickland said: "It's positive news for UK airlines operating to the US market that this agreement has been reached.

"It appears that enough flexibility has been negotiated to allow for different scenarios of either UK or EU majority ownership, a point of importance for IAG, and for Virgin, which is in the process of becoming non-UK majority owned as Air France takes a stake."

Willie Walsh, chief executive of British Airways owner IAG, described the aviation agreement with the US as "a significant positive development which we welcome" that "facilitates strong competition and is clearly pro-consumer".

IAG is registered in Spain and has shareholders from around the world.

Sir Richard Branson is in the process of reducing his stake in Virgin Atlantic to 20% by selling almost a third of the business to Air France-KLM.

Theresa May's Brexit agreement with Brussels says that the UK and EU have agreed to negotiate a "comprehensive air transport agreement" for UK-EU flights during the planned transition period but it would not apply if the UK left the EU without a deal.

In September the government warned a no-deal Brexit could cause disruption to air travel between the UK and European Union countries.

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