London: With all sorts of rumours echoing out of Westminster and the uncertainty that looms around our relationship with countries in the European Union and the rest of the world, it is not surprising to know that there has been a rise in the use of prescription drugs and antidepressants during the past year. For those troubled souls, there is a ray of hope – the UK-US ‘Open Skies’ agreement that allows many airlines to function seamlessly, even if the UK government is unable to strike an iron clad deal before the 29th of March, next year.
Before the deal with the US, all the airlines based in the UK were protected and treated through the US-EU Open Skies treaty that allowed the airlines based in the European Union and the United States to function freely between any two airports across the Atlantic. The agreement was pro-consumer and increased the competition between the entire spectrum of luxury and budget airlines. With the UK leaving the European Union, there was a significant chance that the US would be slapping a lot of tariffs and additional regulations on UK based airlines, disrupting many airline routes. That would have skyrocketed the prices, and a transatlantic flight would have cost a fortune, but thanks to this deal that disaster has now been averted.
The UK has entered in nine such agreements with other nations of the world already, which would be of some relief from the “brexity-anxiety”. The Transport Secretary Chris Grayling was all smiles as he announced to the media that “the UK and the US have agreed to an “open skies” deal for Post Brexit flights”. The Chief Executive of IAG also cited this as a very encouraging advancement and said that the deal is a “significant positive development which the company welcomes… facilitates strong competition and is clearly pro-consumer.”
The deal defines the future relationship between the US and the airline based in Europe and more importantly, in the UK. IAG is registered in Spain, but IAG is also the parent company of British Airways and own 55% of IAGs shares making it a UK majority company. An undefined legal status of IAG, of which American Airlines is also a part of, would have crashed the profits and passenger throughput of the multibillion-dollar company, had this deal not been reached.
As companies and banks migrate to the European shores, other airlines besides IAG and British Airways face challenges and hurdles. Sir Richard Branson is currently in the process of selling 31% of Virgin Atlantic to Air France-KLM, keeping only 20% making the airline a non-UK majority airline. The relationship between the EU and Britain is as yet unclear, as far as the aviation industry is concerned, but today’s UK-US ‘open skies’ development can at least give some of us half a sigh of relief.