BREXIT AND AVIATION: THE CONSEQUENCES OF A NO DEAL SITUATION

If no deal is reached between the parties, as of midnight on March 29, 2019, the UK would leave the EU, with all current approvals of UK entities ceasing to be effective. This would have significant consequences on aviation. Attorney Giulia Mauri explains what you need to do to prepare

As of October 2, 2018, EASA has allowed UK approval holders to start applying for Third Country approvals. This move is in line with an increased acknowledgement from regulators, including EASA and the UK CAA, that agencies and regulators must identify and put in place possible preparedness measures in anticipation of the UK’s withdrawal from the European Union.

If ‘no deal’ is reached, the UK would leave the EU as of midnight on March 29, 2019. If no transitional period is agreed and nothing is done to prepare, current approvals of UK entities will cease being effective, at least in the EU. Under increasing demand from the industry, EASA and the UK CAA have started putting in place measures that could help smoothing the transition should the UK and the EU fail to reach an agreement.

In order to avoid this situation, as of October 2, 2018, UK approval holders may apply with EASA to obtain EASA approvals under the procedure currently reserved to Third Country entities. UK approval holders may therefore apply, inter alia, to obtain approvals for maintenance organizations, maintenance training organizations, continuing airworthiness maintenance organizations, approved training organizations, etc.

At the time of writing, we still do not know if an agreement will be concluded between the EU and the UK and, if one is reached, what kind of agreement it will be.  The negotiations between the UK and the European Union are still ongoing. Although both sides agree on the fact that they want to ensure continued transport connectivity, their ideas on how to implement their visions on those aviation matters are sometimes contradictory.

Deal – Transition Period

In March 2018, the UK Prime Minister declared that the UK could remain part of the EU agencies and that they would have to respect the remit of the ECJ in that regard. The aviation industry has taken the position that air connectivity can only be ensured and improved if the future agreement mirrors what is in place today and supports growth and innovation in the future.

In this sense, the government published a “Framework for the UK-EU partnership” in June 2018, in which it is clearly mentioned that the UK wants to build a comprehensive agreement with the European Union. The structure of the future agreement has already been agreed to and is based on both an economic and security partnership and protecting the shared interests. The implementation of this agreement would be made through a two-year transition period post Brexit.

UK and European institutions insist on the fact that the negotiation of this liberal agreement for the aviation sector is not only a governmental matter – all stakeholders’ views are important, and all must be prepared for any scenario.

No Deal

The impact of such a no deal scenario would be significant. As of the withdrawal date, the UK will automatically cease being covered by the EU transport agreement, as well as the jurisdiction of the ECJ. Under this non-negotiated withdrawal scenario, some regulatory processes will have to be brought back within the UK system.

The UK CAA states that, although they prefer that a deal be made, it is the UK government’s liability to be prepared for any scenario that could happen in March 2019. Consequently, last September, the UK CAA issued some technical guidance to prepare for an exit from the EU without a deal. It also created a website explaining what actions will be taken under a no deal scenario. To stay updated on the latest developments, you can subscribe to the alerting system at: http://SkyWise.caa.co.uk

Likewise, EASA also issued guidance material to help the industry prepare if a ‘no-deal’ scenario occurs.

Main Impacts of a No-deal Scenario on Safety

The main consequences of a no-deal scenario on aviation safety are examined by the guidance notices issued by the UK CAA and EASA. On September 24, 2018, the UK CAA issued two guidance notices, one titled ‘Flights to and from the UK if there is no Brexit deal’ and another titled ‘Aviation safety if there is no Brexit deal’. On October 2, 2018, EASA issued an update on Brexit.

We summarize below some of the consequences of a ‘no deal’ as reviewed by EASA and the UK CAA in their guidance material.

Participation of the UK to EASA

EASA covers 32 European countries (the 28 EU Member States and four associated countries: Iceland, Liechtenstein, Norway and Switzerland). In case of a no-deal Brexit scenario, the withdrawal of the UK will put an end to its participation in EASA. The EU would no longer recognize UK-based licenses, certificates or approvals. The CAA will take over EASA’s competency and will be in charge of delivering approvals for UK-based entities.

However, the UK has recently declared that the UK is not planning to create a new independent aviation safety system, but to adopt the existing EASA regulatory system. If an agreement is reached in this respect, the UK could participate in the work of EASA as a third country with no voting rights.

Flights to and from the EU

According to the guidance materials published on September 24, 2018 by the UK CAA, if there is a ‘no deal’ scenario, airlines wishing to operate flights between the UK and the EU will have to seek individual permissions from the respective state. In this scenario, the UK CAA will most likely grant permission to EU airlines to continue operating in the UK. It is not known what the EU would do.

In order to operate to the UK, EU airlines would need to obtain two separate permits: a foreign carrier permit and a UK safety authorization, a UK Part-TCO. In its guidance material, the UK CAA indicates that they will evaluate each application on a case-by-case basis.

As to UK licensed airlines, in a ‘no deal’ scenario, they will need permission from the national authority of the state to which they operate, coupled with an EASA safety authorization or EASA Part-TCO.

Licenses and Certificates Related to UK-registered Aircraft

Personnel or organizations working on UK registered aircraft currently must hold licenses and permits that are recognized at the European level. The UK CAA has stated that the UK will continue to recognize and accepts licenses and certificates issued before exit day in favor of UK registered aircraft. Those licenses and certificates will therefore be recognized as valid in the UK.

On the other hand, the EU has indicated that certificates and licenses issued before the exit day would no longer be automatically accepted by EASA. This is why EASA has already informed UK permit and certificate holders to apply with EASA in order to obtain a third country approval that would remain valid after the exit day.

Maintenance and Continuing Airworthiness

Under the current European regime, aircraft registered in an EU Member State may be maintained by engineers and maintenance organizations recognized and licensed by EASA, regardless of whether they are located in the UK or in any other member state.

After the exit day, the UK CAA has stated that maintenance-related licenses issued by the UK prior to the exit from the EU will remain valid under UK law. This means that UK maintenance organizations and UK engineers will be able to continue to work on UK registered aircraft.

The current position of the UK is that EASA licenses issued by foreign European states will still be considered valid for an interim period of two years. This means that UK registered aircraft could continue, for a period of two years after exit day, to be maintained by non-UK maintenance organizations and engineers.

However, the EU has adopted another approach. Certificates and licenses issued by the UK CAA before the exit day will no longer be accepted in the EASA system. This means that, after the exit day, UK EASA approved maintenance organizations and personnel will no longer be able to perform maintenance on EU registered aircraft. For these organizations and personnel, on October 4, 2018, EASA opened a special procedure that allows them to file an application as a third country approval holder.

Conclusion

With the exit date quickly approaching, the UK CAA and EASA are making an effort to supply information to affected businesses and to offer them some sort of Plan B to begin preparing for a possible no-deal scenario. In this respect, the EASA initiative to allow UK approval holders to start applying for third country approval before the exit day is particularly remarkable. This measure should help UK approval holders to start putting in place contingency measures to limit the impact of Brexit on their businesses.

Attorney Giulia Mauri is a partner at Pierstone Brussels. She has more than 20 years’ experience in advising national and international clients on all aspects of aviation and transport-related transactions, including asset-finance and leasing, regulatory issues, carrier’s liability and litigation matters. She also acts as a mediator and is the co-founder of Mediation4Aviation, a mediation platform dedicated to the aviation industry. Giulia co-chairs the European and Legal Affairs Committee of the European Business Aviation Association and is an active member of the Industry Affairs Group of the Euorpean Regions Airline Association. www.pierstone.com/team/giulia-mauri; giulia.mauri@pierstone.com; +32 02 899 23 62.