The British Airways owner, IAG, has been seeking Spanish government support to continue its operations in the case of a disorderly Brexit.
According to letters reported in the Spanish newspaper El País, Spain’s government and Brussels doubt whether IAG can remain compliant with EU airline ownership rules.
IAG has reportedly been in talks with Madrid since last month as it attempts to satisfy the EU over its status.
Once its UK shareholders are stripped out after 29 March, IAG could fall below the 51% threshold for EU ownership, affecting most of its airlines, while BA could potentially also need to demonstrate it is British-owned, should some international aviation agreements be stringently applied. As well as BA, the Madrid-registered IAG owns the Spanish carriers Iberia and Vueling, Ireland’s Aer Lingus and a new European low-cost venture, Level.
The airlines may need to prove that they are controlled within the EU. IAG’s operational HQ is in Britain, near Heathrow airport. A spokesperson said IAG had no plans to move its management.
The IAG chief executive, Willie Walsh, has long scorned predictions that the group would be in trouble, arguing that the way IAG had been established since the original 2011 BA-Iberia merger took account of complex international aviation agreements beyond the EU. He said reports earlier this year that a no-deal Brexit could jeopardise BA’s transatlantic traffic, as EU-US bilateral deals fell apart, were “nonsense”.
The group told investors it was confident it would continue to comply with relevant ownership and control regulations in the UK post-Brexit, but was having extensive engagement with relevant regulators to ensure its interests were protected.
However, competitors, most vocally Ryanair’s Michael O’Leary, have claimed that IAGcould not survive Brexit in its current form. EasyJet has relocated many aircraft into the EU and set up easyJet Europe as a separate airline.
IAG said: “We remain confident that a comprehensive air transport agreement between the EU and the UK will be reached. It’s in the UK and the EU’s interests to have a fully liberalised aviation agreement. Aviation liberalisation has been a great success story across Europe, benefiting 1bn customers each year and creating a huge number of jobs across the continent.
“Even if there is no Brexit deal, both the EU and the UK have said they will put an agreement in place that allows flights to continue.”
The UK transport secretary, Chris Grayling, said last month that the EU had yet to agree to talks to put a “bare-bones” aviation contingency deal in place to keep planes flying after 29 March next year.