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EU warns British airlines on post-Brexit flying

By Julia Fioretti

By Julia Fioretti

BRUSSELS (Reuters) - British airlines will lose all flying rights the European Union has negotiated with third countries as well as those negotiated by individual EU states after Britain quits the bloc, the EU executive said in a note.

In a notice to all airlines, a stark reminder of the risks facing the sector if there is no Brexit deal, the European Commission said UK air carriers would no longer enjoy traffic rights under any air transport agreement to which the EU is a party, such as the U.S.-EU Open Skies agreement.

They would also lose flying rights under agreements between individual EU member states and third countries as they would not longer be considered EU airlines.

In addition, all operating licenses granted by the British civil aviation authority will no longer be valid for the EU, the notice said, which means the airlines would be cut off from the intra-EU market.

"In order to continue benefiting from the freedoms of establishment and to provide air services within the EU internal market as of the withdrawal date, air carriers are advised to consider any measure required to ensure that the conditions for holding an EU operating license are complied with in all circumstances," the notice said. Airlines based in the EU have the right to fly to, from and within any country in the bloc thanks to the single aviation market was created in the 1990s, but Britain now has less than two years to renegotiate access or come up with an alternative system.

British carriers include easyJet <EZJ.L>, IAG's <ICAG.L> British Airways, Flybe <FLYB.L>, Jet2 <DTG.L> and Virgin Atlantic [VA.UL].

Budget airline easyJet has already moved to establish a new airline in Austria to protect its flying rights within the EU once Britain leaves the bloc.

Both airlines and airports have been vocal about the risks posed by the no-deal scenario and have urged London and Brussels to quickly provide certainty for the industry.

Airport operators' association Airports Council International has pointed out that more than one in every two passengers handled by UK airports is flying to or from the rest of the EU, making the British market heavily dependent on the EU.

RESTRICTIONS

Without a deal airlines would have to rely on a decades-old traffic rights accord between the UK and EU states. These are typically more restrictive and many observers have doubts as to their validity.

Britain and the EU clinched a divorce deal last Friday, paving the way for them to start talks on future trade ties and a two-year Brexit transition period that will start when Britain leaves the EU on March 29, 2019.

However, Brussels has ruled out a separate deal just for aviation on the grounds that it would be tantamount to cherry-picking.

A Commission spokesman said the notice did not cover the situation of UK traffic rights to and from EU member states that "will be determined in due course".

"The notice is without prejudice to possible transitional arrangements on which talks may start in January," the notice said.

(Additional reporting by Alistair Smout in London and Victoria Bryan in Berlin; Editing by Gareth Jones, Greg Mahlich)