Brexit Headaches Continue For UK’s Charter Operators
As the COVID-19 pandemic continues its unprecedented impact across the aviation sector, Brexit may be starting to feel like last year’s problem.
But the UK’s decision to leave the European Union—and, in particular, the detailed terms upon which the country separated from the 27-nation bloc on Dec. 31, 2020—is continuing to cause considerable difficulties for business aircraft operators. Worryingly, problems may increase once demand begins to return to prepandemic levels.
The deal between the UK and the EU, announced on Dec. 24, included sufficient language to ensure scheduled flights between the UK and the EU remain largely unaffected. But ad hoc operations were not included in the deal, with operators and regulators now facing significantly increased administrative workloads.
The problems affect both EU operators wishing to fly into the UK, and UK operators flying into the EU. But the situation is significantly more complicated for the latter.
“If you’re an airline—if you’re a Jet2 or an EasyJet—this deal is absolutely fine,” says Derek Thomson, commercial director of Air Charter Scotland, a Glasgow-based operator. “When it comes to what we do, this isn’t a great deal. For UK operators, this is like trying to operate with one arm tied behind your back.”
The situation facing companies like Thomson’s since Jan. 1 is unprecedentedly complex. Previously, any company holding a valid air operator certificate (AOC) could fly from the UK to the EU, and operate flights within the EU, on an ad hoc basis. Ad hoc flights between the UK and the EU now require several different permits and authorizations. And while the UK’s Civil Aviation Authority provides a one-stop shop for EU operators wishing to obtain authorization to fly into the UK, British operators must deal with aviation regulators in each of the 27 EU nations.
“Every country has a different process, and that is one of the biggest hurdles for operators,” says Glenn Hogben, chief executive of the Air Charter Association, a UK-based trade body. “You’ve got to try and get an understanding of each individual country’s requirements and try and work through that.”
Hogben explains that, while some nations recognize the UK CAA’s accreditation, others require operators to secure approval as a third-country operator. Some nations charge nothing for this, while one country charges €4,000 ($4,900).
Once approval to operate is secured, permits have to be issued to cover flights. The UK is currently offering a block permit to approved EU operators, covering any flights that take place up to March 29. So far, most of the 27 EU nations are still requiring British operators to apply for individual permits for each flight. The UK CAA charges £85 ($120) for its block permit. Hogben says the range of permit charges across the EU nations runs from zero to €800 ($980) per flight.
“It’s a huge amount to add on to the customer’s bill,” Hogben says. “Because at the end of the day, that’s where the permit costs will ultimately end up.”
Thomson’s company has taken the ultimate in hedge positions by setting up a European subsidiary with its own aircraft on a Maltese AOC—a process that took eight months. Air Charter Scotland Europe Ltd currently has two aircraft on the 9H register and is in the process of transferring more of its fleet to Valetta in Malta. Thomson expects those jets to carry out all of the firm’s UK-EU bookings for the foreseeable future.
“It’s really sad that we’ve had to go down this road,” he says. “But knowing [now] what the deal is, it was a good idea. Our main business portions are UK-EU, or EU-EU, or EU-UK. To have that part ripped away from you [would be] extremely challenging.”
The picture is, if anything, even more complicated in the cargo charter sector. The UK’s block permits only apply to aircraft with 19 seats or fewer, and a maximum takeoff weight of 10,000 kg. For aircraft larger than that, a specific per-flight permit is required. The UK CAA gives a turnaround time of up to 48 hr. to process a permit application.
“And that is very much Monday to Friday, 9 a.m. until 5 p.m.,” says Ed Gillett, founder of the app-based cargo charter broker CharterSync. “So, if we have a request that comes through our platform at 5 p.m. on a Friday, and it’s for a flight that evening or on Saturday, we know that the operator will not be granted the permit.”
For urgent cargoes that cannot wait—and, in the era of vaccines and personal protective equipment (PPE), this is a growth area—there are workarounds. But they involve significant, unpalatable trade-offs.
“What we have been doing is moving the cargo onto smaller aircraft,” Gillett says, noting that this practice is counter to industry-wide efforts to reduce emissions. “Not only that, but there is a cost implication for the end user if they are potentially using three aircraft instead of one,” he adds.
The UK CAA’s adoption of block permits has been criticized for apparently making it easier for EU operators to carry out work than for their British competitors. But Hogben says the system is, in part, a proffer to the other EU nations, and is intended to keep British business moving.
“They’re sort of setting the benchmark,” he says. “They’re saying: ‘This is what we want to do; this is what we want you to do in return.’ And likewise, they’re also trying to support UK business. UK businesses don’t only use UK operators, they also use European operators—and it’s very important for UK businesses to have that ability to continue to trade and bring parts, equipment, and people into the country.”
The UK government’s Department for Transport and the CAA are engaged in a number of bilateral negotiations with their equivalents in the majority of the 27 EU nations. There remains cautious optimism that some sort of solution—most likely, a number of reciprocal bilateral agreements to issue long-term block permits—is achievable. Whether this can be done before the demand for flights—and therefore for permits—returns to pre-COVID levels remains to be seen.