We need a head desk emoji - that poor desk, my jaw keeps hitting it too.
This is from a professional pilots' forum 6 days ago:
"As most of you have deduced the issue here is that as of 1 April 2019 the UK will no longer be included in the existing US-EU 'Open Skies' Agreement. Norway is included in this as a specifically named country, same with Iceland. The UK is only included as a member of the EU. One potential option would have been to make a change to have the UK included in a manner similar to Norway. However, this would require all three of the following to be true
- The UK asks to be included in this manner
- The EU agrees
- The US agrees
Clearly at least one of the above has not happened.
Without this a new agreement must be reached or the freedoms that allow US and UK carriers to fly between each others countries will expire at Midnight on 1 April 2019. Now the US and UK have had early talks on entering into their own agreement. However, the US is insisting on the ownership and control clause plus several other things. The ownership and control clause is part of the US-EU agreement, so there is no difference here. Some of the other terms are clearly less advantageous than the ones in the existing agreement.
The problem for the UK is that the ownership and control clause becomes critical. Under the EU agreement the airlines must be owned and controlled by either US or EU (and named country) entities. This is how IAG, AF/KL, Lufthansa, Norwegian, etc groups can operate from anywhere in the EU to the US. It is also what allows Branson to sell his 31% to AF/KL but could not sell 1% more to DL.
As Nighthawk points out the entanglement of all UK airlines with the EU is the real problem. It is also not as simple as moving ownership about. Control also matters. The US definition is generally around 25% of voting shares if you are the largest shareholder. For example, Branson could not have more than 25% of Virgin America voting shares if there were no larger US shareholders than him, and his total shareholding could not have been more than 49%. The US tends to be quite ruthless about this. What does this mean
- For BA to qualify it would probably have to be completely divested from IAG, that is even 25% shareholding by IAG might still be too much as Madrid would not be allowed to control the operations of BA
- TUI UK will leave the Orlando market
- Norwegian will not be able to continue operating out of the UK at all
- Virgin has the lease amount of change. All that has to happen is they create a new, US registered airline that is 51% owned by DL and 49% by Branson and AF/KL, or better yet ~24.5% by each to keep under the US 25% threshold. This would then be allowed to operate between the UK and US. The rest of VS could operate to other locations. This is similar to what VS already does for a few Caribbean routes.
- Thomas Cook is an interesting question. They are currently UK controlled, but have significant EU operations. Condor for example. They will either have to transfer to EU control, which bind TCX UK, or sell off Condor and their other European Airlines. The status quo will not allow both TCX and Condor to continue operating to the US.
And this is not the worst case scenario. There is still the no agreement in principle by Oct-Dec timeframe. That could be catastrophic."