British Airways and Iberia-owner IAG faces difficulties complying with EU ownership-and-control rules post-Brexit, a leading aviation analyst has warned.
Tim Combs, managing director of Aviation Economics, described the EU’s rules for airlines as “the elephant in the room”.
Speaking at the Business Travel Show in London on Wednesday, Combs said: “The EU rules are clear. The airline group with most problems is IAG [and] I can’t see how they can resolve the issue.”
The rules require European airlines to be majority-owned and controlled by EU investors in order to benefit from Europe’s open skies.
IAG maintains it will be able to comply but has yet to say how.
The group owns not only BA and Iberia but Aer Lingus and Barcelona-based Vueling. It is listed on both the London and Madrid stock markets.
The EU has said airlines will have seven months in which to comply with the rules should Britain exit the EU without a deal at the end of March.
Combs said: “I don’t understand how you can have an airline within the group that is UK-owned and controlled and an airline that is EU-owned and controlled.
“If I was running Air France-KLM or Lufthansa I might challenge how IAG is complying with the rules.”
However, Combs dismissed the EU’s threat to cap UK-EU flight capacity at the level of last summer, saying: “I don’t find it a credible a threat, to cap seats that have already been sold.”
Boston Consulting Group global travel director Gehan Colliander said the EU rules “put us in a difficult situation. We don’t know if our travellers will be able to use them [IAG airlines].”
Rudiger Bruss, travel and mobility category manager at automotive manufacturer Continental, said: “We are advising travellers to keep Brexit issues in mind. It’s a wait-and-see approach.
“We are not actively avoiding these airlines now. [But] come May and June there could be an impact up to and including cancellations.”
IAG announced a ban on the purchase of shares by non-EU investors last week as it moved to comply with the rules but said the restriction would not apply to UK investors who will be classed as “non-EU” following Brexit.
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