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IAG rejects Ryanair prediction for post-Brexit British Airways - Metro US

IAG rejects Ryanair prediction for post-Brexit British Airways

FILE PHOTO: Ryanair Chief Executive Michael O'Leary attends a Reuters Newsmaker event in London

By Laurence Frost

PARIS (Reuters) -Airline group IAG is confident of meeting all EU regulations relating to its ownership British Airways, it said on Monday after the CEO of rival Ryanair suggested it may have to jettison the UK flag carrier after Brexit.

Ryanair boss Michael O’Leary believes IAG may have to relinquish ownership of British Airways after Britain’s Brexit transition ends on Dec. 31, saying he expects France and Germany to insist on strict application of EU rules demanding that airlines must be at least 50% owned by EU nationals or risk losing their operating licences.

“I cannot see how IAG can survive as an owner of BA in a post-Brexit environment,” the Ryanair CEO told an online Eurocontrol event on Monday.

However, an IAG spokeswoman responded by saying: “We are confident that we will comply with the EU and the UK ownership and control rules post-Brexit transition period.”

IAG is a Spanish-registered company headquartered in Britain and listed on both the London and Madrid stock exchanges.

In October IAG’s chief executive told investors that the percentage of non-EU shareholders was 39.5% in January but declined to disclose the percentage of UK shareholders or provide a more recent figure.

After the Brexit transition ends this month, UK shareholders will no longer be treated as EU shareholders.

“I think it is likely there will be some breakup of the IAG group, or BA will have to step outside the IAG group,” O’Leary said.

IAG, which also owns Iberia in Spain and Aer Lingus in Ireland, has previously said contingency plans have been agreed by relevant national regulators.

While O’Leary cast doubt over the shape the post-Brexit shape of IAG, he does not expect Brexit to have much impact on air travel in general.

“People will still move between Europe and the UK,” he said.

O’Leary also tempered his previous optimism about the timing of an eventual travel rebound. Ryanair still expects to lead a strong recovery, “not necessarily in the summer of 2021, but in the winter of 2021” and onwards, he said.

(Reporting by Laurence FrostWriting by Sarah YoungEditing by David Goodman)

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