The Post-Brexit Divide in Aviation

At the proverbial 11th hour, the EU and UK worked out a continuity agreement for aviation, post-Brexit. Naveed Kapadia, Founder and Director of aviation business and management consultancy INQUISITIF, examines the impacts on training organisations, pilots, cabin crew and maintenance engineers.

“We might be leaving the EU and EASA, but nothing in that implies isolationism: we do not want to distance ourselves from Europe, or anywhere else.” So declared Sir Stephen Hillier, former head of the Royal Air Force, who had been announced last May as the new Chair of the UK Civil Aviation Authority. The UK CAA, a public corporation of the Department for Transport (DfT), is responsible for the regulation of aviation safety in the UK.

Sir Stephen had been parachuted into the role two months after the UK had declared they would “no longer participate in the European Union Aviation Safety Agency’s (EASA) system after the transition period ends.”

Transport Secretary Grant Shapps had claimed much of the EASA expertise came from the UK and that a lot of its leaders were British, “and the expertise will need to come home to do that, but we'll do it in a gradual way”.

At the time, the trade body ADS – representing more than 1,100 UK businesses in the aerospace, defence, security and space sectors – estimated it would take 10 years and cost up to £40m annually to create a UK safety authority with all the expertise of EASA (compared with a pre-Brexit contribution to EASA of £1m to £4m a year).

British Airways owner IAG said it was “disappointed” with the decision and said the Civil Aviation Authority “does not have the expertise required to operate as a world-class safety and technical regulator. The CAA will require fundamental restructuring from top to bottom, which will take time”.

Countries that are not member states of the EU are allowed to participate in the EASA processes where they have entered into agreements with the EU, such as Norway, Iceland, Liechtenstein and Switzerland. It was open to the UK to negotiate participation on similar terms and thereby receive many of the benefits of EASA. Had they done so, the technical regulatory environment existing pre-Brexit could have proceeded virtually unchanged (though the UK would never have the same level of influence within the EASA legal framework). Indeed, there had been indications that the UK would explore continued cooperation with EASA … until the March 2020 declaration.

Delivering the Royal Aeronautical Society Brabazon Lecture in November, Sir Stephen stated, “We have recruited the additional people we need; we already have a strong body of expertise; and we’ve progressed to stress testing our new structures, to ensure that we’re as ready as we can be. We might be out of EASA, but we remain one of the world’s leading aerospace nations, with the industry, international relationships and reputation to match. We recognised early on that in order to maximise stability for the aerospace sector, we would need to form new working agreements with regulators in the markets that our industry works with most closely – and that’s exactly what we’ve been doing, and will keep doing. Whilst mitigating the risks, we should also look to the opportunities, and exploit the potentially greater freedoms we have in our decision-making.”

Are We There Yet?

The European Union (Future Relationship) Act 2020, now enacted in the UK, implements the EU-UK Trade and Cooperation Agreement (TCA) between the United Kingdom and the European Union announced on 24 December 2020, including agreements on air transport and aviation safety which came into effect at 2300 GMT on 31 December 2020.

While the agreements involve some elements of continuity, 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 in the UK will face changes that will be communicated via a special UK CAA microsite (https://info.caa.co.uk/uk-eu-transition/) as the information becomes clearer about how the new arrangements will work in practice. The EASA website (www.easa.europa.eu/brexit) will also continue to be a central source of information for the aviation and aerospace industries and will highlight the actions they need to take to address challenges emanating from the UK no longer participating in EASA systems, including UK-issued safety certificates no longer automatically recognised within the EU.

It is no surprise therefore that the UK has proceeded with Bilateral Aviation Safety Agreements (BASA), Memoranda of Understanding (MoU) or Working Arrangements (WA) and their associated implementing procedures to ensure continuity of arrangements with the USA, Canada, Brazil, Japan, Singapore and Switzerland, and provide for technical cooperation between the respective national civil aviation authorities. They help reduce duplication of activity and aim for mutual acceptance of certificates between the signatories.

In the following, we summarise pertinent points of what is currently known about the separate ways forward in the UK and on the European continent with a primary focus on the regulatory impact on commercial aviation training. Due to a continuous changing landscape, it is highly recommended to reference the official UK/EU sources for the most up to date guidance as they are made public.

IMPACT: Commercial Aviation Training – UK Perspective

The TCA allows commercial air transport services between any points in the now-27 EU states and the UK (3rd and 4th freedoms) to continue on a reciprocal basis. A permit or permission is required to be held before a commercial flight is undertaken, issued by the relevant EU27 via their own separate systems for such permissions. Onward carriage (5th freedom) will be possible for the carriage of cargo to/from a third country (e.g., Munich-London-New York) if member states agree this bilaterally and reciprocally with the UK.

The majority of the UK’s Air Service Agreements beyond the European Union (EU)/European Economic Area (EEA)/European Free Trade Association (EFTA) are unaffected by EU withdrawal. UK carriers no longer have access to traffic rights under the EU’s air service agreements with other states and the DfT has replaced, or is in the process of replacing, any EU Air Service Agreements on which UK air carriers rely.

All permissions, approvals, variations and exemptions (PAVEs) current and valid on 31 December 2020 will continue to be recognised by the UK within the scope and terms of their issue and will remain valid under UK law. However, CAA-issued PAVEs will no longer be recognised by EU member states. It is clear now that aerospace businesses, airlines and aviation personnel will need updated or changed certification, licences and documentation to design, produce, maintain and operate aircraft between the UK and the EU, Switzerland, Norway, Iceland and Liechtenstein.

In the immediate to short term, as of 1 January 2021:

IMPACT: Commercial Aviation Training – EU Perspective

On 1 January 2021, EU aviation safety legislation, including Regulation (EU) 2018/1139 establishing EASA, no longer applies to the UK. As of that date, the UK is considered a TCO and no longer has the status of an ‘EASA Member State’.

During negotiations and discussions, the EU stance was that a free trade agreement does not provide for internal market concepts (in the area of goods and services) such as mutual recognition, the ‘country of origin principle’, and harmonisation. Nor does a free trade agreement remove customs formalities and controls. The concept of level playing field was discussed in many settings. These discussions highlighted critical areas for airlines to focus on, specifically the ownership rule of at least 50% by the EU nationals and the traffic rights to continue the flying programmes between the UK and Europe. The TCA includes an article requiring that both the EU and UK agree to consider options for the reciprocal liberalisation of the ownership and control requirements for air carriers within 12 months of entry into force of the ‘Agreement’.

At the time this was written, updates from EASA included (effective from 1 January 2021):

IMPACT: ATOs

IMPACT: Cabin Crew

IMPACT: Maintenance Engineers

IMPACT: Airworthiness Certificates – UK Registry

To minimise the risk of disruption, the UK CAA is making a letter available to all operators confirming the validity of Certificates of Airworthiness (CofA), Airworthiness Review Certificates (ARC) and Noise Certificates for carriage on UK aircraft. This letter should be carried onboard the aircraft at all times. The UK CAA has also communicated to all National Aviation Authorities the legal basis for this decision.

What’s Next?

The temporary arrangements between the United Kingdom and European Union came to an end on 31 December 2020. At that point, UK membership of EASA and other EU institutions ceased.

On the UK side, Parliament approved the legislation required to implement the agreement prior to ratification by the European Parliament and the Council of the European Union. The bill went through all of its House of Commons and House of Lords stages before 31 December, received Royal Assent, and became the European Union (Future Relationship) Act 2020.

The European Commission proposed to apply the TCA on a provisional basis, for a limited period of time until 28 February 2021, to enable the European Parliament's right of democratic scrutiny, in accordance with the Treaties. Ambassadors of the EU27 unanimously approved the Trade and Cooperation Agreement before it was signed by the presidents of the European Commission and the European Council. The European Parliament is now asked to give its consent to the agreement. As a last step on the EU side, the Council must adopt the decision on the conclusion of the agreement.

There is no denial that the UK and the European Union will remain strategic markets for each other. For Britain, the mammoth and complex task of establishing its own aviation governance, British safety regulations, in-house certifications and inspection, the manpower, expertise and financial support needed cannot be underestimated. The void left by the EASA regulations will need to be met by UK CAA regulations. Mere application of the EU law will unlikely solve the institutional challenges.

For UK aviation businesses and licence holders, departure from EASA will make life more complex. While the aviation safety section of the TCA provides for mutual recognition of design approvals, type certificates, repair approvals and production oversight, many organisations and individuals will have to develop dual-compliance models to maintain the two-market appeal of their products or services.

Sir Stephen said the UK CAA is “committed to engagement, learning, and adapting; we continue actively to seek out contributions, advice, and insight, to help us ensure that we can discharge our remit and assist you, to the very best of our ability. We’re aiming to enable the sector to thrive in a post-EU transition context by exploring opportunities where we can, consistent with safety and our international obligations; simplify and rationalise regulation, removing red-tape and gold-plating; streamline and speed up processes; be more proportionate; delegate where practical and wanted; encourage innovation”.

Although they have formally split, the UK and EU will not want to distance themselves from each other. After all, we have more in common than that which differentiates us, for now.

Further Reading