Operators Still Grapple with Brexit Two Years Later

 - January 2, 2023, 7:46 AM
An RVL Aviation King Air, used for passenger, freight, and surveillance services.

Two years have passed since the UK formally exited the European Union (Brexit) and a new set of rules and regulations covering trade, travel, and business came into play. 

Europe’s business aviation community continues to reel from the break-up, which initiated a host of unwelcome changes to the regulatory and operational landscape.

“Although a lot of time has elapsed since the transition period ended [on Dec. 31, 2020], it has been a challenging period, not least for the commercial operators in the UK and EU, which overnight went from having unfettered access to each other’s airspace to holding the far inferior third country operator status [TCO], with new rules and restrictions to navigate,” said Marc Bailey, chief executive of UK trade body, the British Business and General Aviation Association (BBGA).

His view is echoed by Robert Baltus, chief operations officer for the European Business Aviation Association (EBAA), who suggests that Brexit and the subsequent trade agreement between the EU and UK have caused “an unnecessary increase in red tape” for its members.  

He slams Brexit as a “political choice based on many one-liners, by politicians with limited knowledge of the benefits of having open borders, free movement of goods and staff, and one large market.”

For EBAA’s EU-based members, there is an “overwhelming sadness about the loss of the UK as a leading partner in Europe and main contributor to regulators and institutions like EASA [European Union Aviation Safety Agency],” Baltus conceded.

Even the small group of UK-based members who still support the idea of Brexit “are realizing that the perceived benefits are hard to gain due to the loss of market for their services and due to the increased red tape surrounding operating flights around Europe.”

Baltus believes the UK business aircraft industry and its consumers have been hit particularly hard by the Brexit fallout, largely as a result of the decline in the number of aircraft being available for internal flights—with cabotage no longer permitted. Preliminary data from the EBAA reveals the tally of UK (G)-registered business jets fell by 20 percent between February 2020 and October 2022 from 315 to 255, with aircraft largely shifted to EU-based registers and air operator certificates (AOCs) mainly in Malta, Ireland, and Austria.

The loss of unrestricted access to the UK market has nonetheless been a blow to many EU charter providers given the country’s huge draw as a thriving business, finance, and leisure destination. “It’s one of the largest and most important markets in Europe,” said Bailey.

To soften the impact on EU operators’ post-transition, the UK government via the Department for Transport (DfT) and Civil Aviation Authority (CAA) permitted EU operators to continue exercising third and fourth Freedom rights—allowing flights to and from the UK—under a three-month block permit agreement that it hoped would be mirrored by other EU regulators.

This concession was one-sided initially, however, leaving non-scheduled UK carriers having to secure costly and time-consuming permits on a flight-by-flight basis.

“It was a frustrating time for UK operators in early 2021 with many losing bookings to EU competitors as a result of this clunky system,” said Glenn Hogben, chief executive of European trade body the Air Charter Association (ACA).

Frustrations were fed back to the DfT and CAA, forcing the pair to stipulate to their EU counterparts that renewal of the UK’s block permit would be conditional on each country providing a reciprocal arrangement for UK operators.

This approach has largely paid off, not least because of the pressure heaped on EU countries by their national operators keen to continue hassle-free access, albeit on a more restricted basis, with the lucrative UK market. To date, 18 of the 27 EU member states have reciprocal multi-month permits in place with the UK, said Hogben—with others pending.

Bilateral agreements—outlining what is required for each type of flight—have been concluded between the UK and 21 member states. Of the remaining six countries, five are still in negotiations with the UK, and one, Romania, “does not want to do a bilateral,” Hogben revealed.

These bilateral agreements with the UK are wide and varied, he explained. “Latvia does not require UK charter operators to have block permits for Third and Fourth Freedoms as long as the aircraft has no more than 10 seats and has a maximum takeoff weight of less than 5.7 tonnes [5,700 kg/12,566 pounds]. The Czech Republic has a seat limit of 19 but no restriction on mtow. For Malta, the limits are 19 seats and 10 tonnes, while Portugal and Germany permit these lower Freedoms to UK operators with aircraft up to 20 seats and weighing 10 tonnes and under,” said Hogben.

Of course, given the nature of business aviation, many flight requests do not fall into the basic Third and Fourth Freedoms. More complicated itineraries involving flights within or to and from several EU countries are common and fall into higher Freedoms, many of which are not covered by UK-EU bilaterals or the block permits, Hogben noted.

 This is particularly acute for cargo operators whose business models frequently involve time-critical flights between several countries.

BBGA’s Bailey said Fifth Freedom rights—flights between two countries from the home base—were granted “from the beginning” for cargo flights because of the nature of the industry. “What cargo operators can’t do now is use the Seventh Freedom to pick up cargo from A and take that on to B [without touching the homebase] unless they have a permit.”

Changes in Operations

These operating restrictions have been a huge blow for UK specialist charter company RVL Aviation. “Losing our unlimited access to the internal markets of 27 countries has impacted our business, with the permit system making time-critical and seventh Freedom cargo flights more complicated,” said RVL chief executive Dave Connor.

The company’s cargo-configured Saab 340B became a casualty of the new operating framework.

“The aircraft became commercially unviable to run, so we handed it aircraft back to the lessor,” noted Connor.

RVL, which provides passenger, freight, and surveillance services with a 10-strong fleet of Beechcraft King Airs and Cessna F406s, is adjusting its business model to reflect the new operating environment. 

“We are in the planning stage of securing an EU-based AOC to re-establish a European footprint,” said Connor. The East Midlands Airport-based company is also exploring “overseas opportunities” in specialist segments such as survey and surveillance where “the operating landscape is less prohibitive”.

Connor’s frustration with the “operating landscape” is shared by George Galanopoulos, chief executive of VIP charter and management company Luxaviation UK.

“If we want to fly a customer, say from London to two or more EU countries, we have to ask permission from each state, and approval can take a minimum of 48 hours, depending on who you are dealing with. On top of that, several states have a non-objection system whereby we have to give all qualifying local operators the opportunity to accept or turn down the EU legs of the flight,” he added.

This added layer of bureaucracy is unwelcome, and while some countries regularly grant permission for the flight within the 48-hour window without objection, others are not so compliant. Galanopoulos will not name the recalcitrant territories, but leading business aviation markets France and Germany are regularly cited as inflexible.

“It’s fine if you have plenty of notice for the charter flight, but it is very difficult to accept bookings with lead times of less than 48 hours now, so we are missing out on valuable business,” said Galanopoulos.

Some of this work is picked up by Luxaviation’s network of operators across the EU to keep the business within the group.  “Likewise, we provide support for our European partners who face similar challenges operating with the UK market,” he said. 

Abdel El Hamdi, director of charter sales for Luxaviation Germany and Luxembourg, calls the collaboration with its UK stablemate “vital in the post-Brexit operating environment.” While block permits for Third and Fourth Freedom flights are a positive offering from the [UK] CAA, he conceded, “it is frustrating that we cannot operate unhindered any longer within what is the biggest market for private aviation in Europe.”

Luxaviation’s Embraer Legacy 650 could fly more if Brexit limitations weren’t so strict.
Luxaviation’s Embraer Legacy 650 could fly more if Brexit limitations weren’t so strict.

El Hamdi’s exasperation is shared by VistaJet, the Malta-headquartered high-end charter provider and one of Europe’s largest operators with a multi-model Bombardier fleet.

“The situation is so disheartening,” said VistaJet chief commercial officer Ian Moore. “The ease of doing business between the EU and the UK has now gone because new barriers have been erected. That really can’t be good for any party.”

With VistaJet’s ability to fly within the UK now “severely curtailed,” the impact is being felt most acutely by customers of its VIP charter program who have acquired hours that they wish to use on UK-based flights.

For customers wishing to fly into London and then on to another part of the UK, no less than 48 hours notice is now required. Permissions could take even longer if the request is submitted outside the CAA's traditional working hours of 9 a.m. to 5 p.m. Monday to Friday and particularly ahead of a weekend or bank holiday.

VistaJet’s European fleet is curtailed from operating within the UK.
VistaJet’s European fleet is curtailed from operating within the UK.

“The CAA is not alone among the global aviation authorities in only issuing permits during business hours and on business days, but given that many companies in our space run a 24/7 operation it would be great to see this practice updated,” said Moore.

As an added woe, cabotage rules for third-country operators prevent VistaJet from picking up passengers within the UK and transporting them internally.

To fulfill its contractual obligation, VistaJet sub-charters aircraft through local UK AOC holders, but this service has come at a huge expense. “The price to conduct internal UK flights has gone through the roof,” said Moore. “These are well and truly above what people would consider normal for a typical one-hour or one-and-one-half-hour flight.”

VistaJet is now mulling the idea of offering a dedicated, in-house operation to serve the UK market—by “possibly” acquiring a local established operator or setting up a UK AOC with G-registered aircraft sourced from its current line-up. This could also include aircraft from its sister company Air Hamburg. The German charter and management provider was snapped up earlier this year by VistaJet’s parent company Vista Global. “It’s definitely a consideration, but this could create other issues and problems for us such as unwelcome empty legs,” he added.

Moore describes the UK as one of VistaJet’s stronger European markets. “Not only do we have a sales and marketing base in London housing a decent number of employees, but many of our international clients have homes, businesses, and even children attending school in the UK, and they want to spend time there,” he said.  

And the demand for the UK as a destination sees no signs of letting up. “The UK—London in particular—fits in as part of a customer's portfolio of flights and the last thing we want to do is say ‘no’ [to a request] as they will take their businesses elsewhere,” Moore conceded.

“People enter into a multi-year contract with VistaJet because they trust us to deliver a high-end, reliable service, that is why it is important that find a cost-effective and efficient solution for the UK market,” he added.

Difficulties for Pilots, MX Technicians 

The UK’s departure from the EU has not only produced a less favorable operating environment for the region’s commercial operators, pilots and maintenance personnel have also been impacted.  

The CAA’s reestablishment under the trade agreement as a separate oversight organization from Jan. 1, 2021, resulted in EASA no longer recognizing UK-licenced pilots and engineers.  The UK regulator extended its licensing recognition to Dec. 31, 2022, for EASA-approved personnel, but from January 1 those pilots and engineers who do not have a CAA license will no longer be able to work for UK companies or operate on UK-registered aircraft. 

These new personnel licensing regulations have restricted considerably the pool of talent available to UK-based maintenance providers. “I know that British Airways is looking for some 300 engineers and those are not available in the UK market. A similar number are also needed at Bombardier’s recently opened business aircraft maintenance facility at London Biggin Hill airport,” Bailey conceded. 

The UK is “nowhere near generating enough homegrown talent” with the challenges having increased through the Covid pandemic.

He fears the shortage of licensed personnel will drive up salaries that only the larger corporations will be able to afford. “This will leave SMEs [small and medium-sized enterprises] in a vulnerable position,” said Bailey.

To plug this gap in the short term, Bailey is calling on the UK government to establish a fast-track recruitment process with the EU and other international bodies to allow local companies to secure necessary resources.

“Meanwhile we must put immense effort into growing our own aviation talent to feed in over the next four to six years,” he said.

This strategy includes developing a consistent approach to providing training that leads to attractive employment opportunities for younger people and creating centers of excellence for training that have strong connections with organizations in other countries. “This will ensure that the UK is viewed as an attractive location for aviation careers,” said Bailey.