Home / Insight / Brexit / Aviation

Aviation

Checklist

On 24 December 2020, the European Commission and the United Kingdom reached a ‘Trade and Cooperation Agreement’ (TCA) on the terms of their future cooperation, covering every aspects of the UK withdrawal from the EU, including its impact in the air transport sector. 

The TCA provides for a chapter dedicated to aviation services and aviation safety, and an Annex concerning airworthiness. It also sets up a framework for future Annexes to the TCA that will facilitate the recognition of UK and EU certificates, approvals and licenses. Additional Annexes may be agreed upon in the future between the UK and EU concerning environmental certificates and testing of civil aeronautical products, monitoring of maintenance organisation, personnel licensing and training, operation of aircraft, and air traffic management.

The TCA also provides for the creation of a Specialised Committee on Air Transport to address aviation matters. It will assist the Partnership Council, the main governing body of the TCA and a forum for discussion between the UK and the EU.

The main implications of the TCA on aviation can be summarised as follows:

Traffic rights between the UK and EU are preserved

As from 1 January 2021, UK and EU operators are considered as third country operators in each other’s airspace, but globally, their traffic rights are preserved. 

The TCA grants EU and UK carriers first to fourth freedom rights, that is to say:

  • The right to overfly the UK/EU Member States without landing (1st freedom);
  • The right to make a stop in each other’s territory for non-traffic purposes, such as refuelling or carrying out maintenance (2nd freedom);
  • The right to perform unlimited carriage of passengers and cargo between points in the EU and points in the UK (3rd and 4th freedoms), with no limits as to capacity, frequency, aircraft… and to freely determine their tariffs on the basis of fair competition on the market. 

Nevertheless, cabotage rights are not granted under the TCA. Therefore, UK carriers are no longer able to operate intra-EU routes (within one Member State or between different Member States) and EU carriers may not operate domestic UK routes. This is the reason why some airlines have set up UK or EU subsidiaries. 

The TCA still allows UK and EU carriers to enter into code-sharing agreements, which allows air carriers to act as marketing carriers on routes which only air carriers licenced in that jurisdiction may operate. Code-sharing agreements may also be concluded with third country airlines provided that the operating airline has the relevant traffic rights.

Fifth freedom only permitted for cargo

The TCA provides that the UK and EU Member States may enter into bilateral and reciprocal agreements concerning cargo services with respect to the fifth freedom, i.e. the right for a UK carrier to fly between an EU Member State and a third country where that flight originated or will terminate in the UK.  

Ownership and control

The TCA is clear on the topic of ownership and control. Air carriers must have their principal place of business in their own country and must hold an Air Operating Certificate from the competent authority in their own jurisdiction. In addition to this, the TCA provides that:

  • UK carriers that were majority-owned and effectively controlled by UK and/or EU/EEA/EFTA nationals as on 31 December 2020 may continue to operate services between the UK and the EU by accessing the traffic rights granted by the TCA. They still considered as UK carriers.
  • a new UK carrier established after 31 December 2020 would need to be majority owned and effectively controlled by UK nationals to access the traffic rights granted by the TCA.
  • EU airlines will need to comply with EU law currently set out in Regulation (EC) 1008/2008 and ensure that they are majority owned and effectively controlled by EU/EEA/EFTA nationals to access the traffic rights granted by the TCA.

The TCA recognizes the potential benefits of continued liberalisation of ownership and control of their respective air carriers, so the ownership rules may be reviewed in the future.

Non-discrimination and doing business

The TCA provides for a duty to eliminate all forms of discrimination which would adversely affect the fair and equal opportunity of the other air carriers to compete in exercising their rights to provide air transport services. 

The UK and EU have also agreed to cooperate in removing obstacles to doing business for air carriers of both parties where such obstacles may hamper commercial operations, create distortion to competition or affect equal opportunities to compete.

Commercial operations

The EU and UK granted each other certain rights in order to facilitate their respective carriers’ commercial operations. These rights relate to the establishment of offices and facilities by carriers, groundhandling services, transfers of funds, intermodal transport and wet leasing.

For instance, under the TCA, UK carriers may wet lease from other UK or EU carriers, and EU carriers may wet lease from other EU airlines. The UK will be considered as a ‘third country’ for the purposes of ongoing application of Regulation (EC) 1008/2008 in the EU, so although the reciprocity point is satisfied, UK carriers will have to go through the same process as other non-EU airlines if seeking to wet lease to EU carriers.

Wet leasing from other airlines – i.e. from outside the EU, or by EU carriers from UK airlines – requires justification on grounds of exceptional needs, seasonal capacity requirements or operational difficulties, and is only permissible for so long as those requirements apply.

Aviation safety

The TCA provides for mutual recognition of certificates of airworthiness, certificates of competency and licences issued or validated by the EU or UK’s competent authorities (the UK will have its own safety regulator, standards, and certifications), provided that these were issued or validated pursuant to and in conformity with the relevant international standards established under the Chicago Convention.

For failure to comply with safety standards, the TCA provides for the possibility to suspend or revoke relevant carriers’ operating authorisations or technical permissions or impose conditions on such authorisations or permissions in certain circumstances.

As mentioned above, an Annex on airworthiness has been agreed, and there is also a framework for agreeing further Annexes that will facilitate the recognition of UK and EU certificates, approvals and licences. 

Aviation security

The UK and EU have agreed to common standards and cooperation in this area, including: 

  • to provide each other upon request with all necessary assistance to address any threats to the security of civil aviation;
  • to act in conformity with the aviation security standards established by the UN International Civil Aviation Organisation’s and require registered carriers and airport operators in their respective territories to confirm with those standards;
  • to ensure that effective security measures are taken within their respective territories, including screening of passengers and other persons, screening of baggage and cargo, access control to security restricted areas and other security controls;
  • to endeavour to cooperate on aviation security matters to the highest extent, to exchange information on threat, vulnerability and risk, to discuss and share best practices and results, to cooperate on the technical development and recognition of aviation security standards.

Consumer protection

The TCA provides for the objective of achieving a high level of consumer protection and cooperation to that effect.

Regulation (EC) 261/2004 on compensation for delayed and cancelled flights no longer applies for flights departing from the UK, but the UK has transposed the wording of this Regulation into UK legislation. 

In the longer term, some consumer protection provisions may diverge, but the TCA stipulates that “effective and non-discriminatory measures are taken to protect the interests of consumers”.

Environment

The UK is no longer bound by the EU Emissions Trading Scheme (EU-ETS).

In that respect, the TCA stipulates that an “effective” carbon pricing mechanism must be maintained by the UK for aviation. This could potentially mean the International Civil Aviation Organization (ICAO) scheme or a UK emissions trading scheme in which UK aviation operators will participate.  

Back to Brexit