UK-EU Deal Preserves All Third- and Fourth-freedom Rights

 - December 28, 2020, 1:14 PM

New rules governing the relationship between UK and European Union aviation and aerospace industries to come into force on January 1 give EU and UK airlines the right to overfly each other's territory, make technical stops, and to operate third- and fourth-freedom passenger and cargo flights between any point in the UK and any point in the EU27.

However, under the EU-UK post-Brexit agreement, UK airlines will operate as third country air carriers to the EU and will thus lose access to the bloc's fully liberalized aviation market. They can no longer operate passenger and/or cargo flights between destinations in the EU, or the wider European Economic Area (EU member states plus Iceland, Liechtenstein, and Norway). Likewise, EU carriers will have no right to operate domestically within the UK.

The UK formally exited the EU on Jan. 31, 2020 but it entered an 11-month transition period during which EU law continues to apply and the UK and its aviation sector continues to participate in European Union Aviation Safety Agency (EASA) systems. The UK also continues as a party to the EU Air Services Regulation, which establishes common rules for the operation of EU air carriers in the internal aviation market. All this, however, will conclude at midnight on December 31 and the terms of a new EU-UK Trade and Cooperation Agreement will start applying—on a provisional basis.

EU and UK negotiators reached a last-minute deal on December 24. While the agreement avoids a highly disruptive no-deal Brexit and averts tariffs and quotas on goods crossing the English Channel, both sides have warned the new regime will recreate barriers to trade in goods and services and to cross-border mobility—in both directions, affecting public administrations, businesses, citizens, and stakeholders on both sides. There will be customs formalities and checks on UK goods entering the EU, and vice versa. UK visitors to the EU and Switzerland, Norway, Iceland, or Liechtenstein will need a valid passport and visas for stays over 90 days in a 180-day period. They will no longer be able to use EU fast-track passport control and customs lanes.

The new regime makes fifth-freedom rights possible, but only for the carriage of cargo and if EU member states agree bilaterally and reciprocally with the UK. The post-Brexit deal also allows for codeshare and blocked-space arrangements between UK and EU27 airlines.

Ownership and control rules require an EU airline to be majority-owned and effectively controlled by EU/EEA/Swiss nationals, have its principal place of business in the EU, and have an EU air operator certificate. London requires similar conditions for its airlines, but it has shown more flexibility regarding the ownership in its willingness to grant operating authorizations and permissions to air carriers in the UK even if they are majority owned and effectively controlled by one or more nationals of EU/EEA member states and Switzerland. The widely expected liberal stance solves potential hurdles for carriers like British Airways, Norwegian UK, and Wizz Air UK, which now can retain full market access to the UK despite their majority ownership by EU interests.

The treaty pledges cooperation on aviation safety, security, and air traffic management. Following the withdrawal of EASA, the Civil Aviation Authority in the UK will assume the role of the country’s competent authority for design certification, production certification, and export certificates of aeronautical products and airworthiness certificates. At press time, the UK CAA’s Brexit micro-website stated that the EU-UK Trade and Cooperation Agreement and its annexes involve “some” elements of continuity, but they do not constitute a replication of the UK’s regulatory arrangements as part of the EASA/EU framework. "Many sections of the aviation and aerospace industries will face changes after 31 December,”  it notes, adding that it “will study the detail of the new agreements and will update relevant pages of the microsite as information becomes clearer about how the new arrangements will work in practice.”

Paul Everitt, chief executive of the UK aerospace trade organization ADS, welcomed the agreement, though he warned of timing difficulties given less than a week remains until the end of the transition period. “The government must issue swift, clear, and comprehensive advice to businesses on preparations and work urgently to put all necessary arrangements in place,” he stressed.