The impact of Brexit has landed.
There will now be three easyJets, all with a capital letter in the wrong place and all located in different places – one in the UK, one in Switzerland and now one in Austria.
This new airline, easyJetEurope, will come with its own fleet of planes and its own staff, but make no mistake – it is part of easyJet’s UK operations. The planes won’t actually spend their lives in Austria, the big decisions will still be made in Luton.
This is a clever, and rather expensive, answer to a new problem.
For easyJet, this is a £10m insurance policy against the dreaded prospect of having to curtail – hugely – its timetable of flights around Europe.
That might seem an unlikely prospect, but it’s one that is now giving sleepless nights to plenty within Britain’s airline industry.
Image: The new airline – easyJetEurope – will be based in Vienna, Austria
Put simply, there is a huge and complex set of rules that governs the ability of airlines to fly their planes.
They govern which countries the airlines can start off from, where they can go to, which passengers they can pick up, where they can drop them off, and then where they can fly to next.
They are rules of which most of us have remained oblivious to for years. After all, when you get on a plane you tend to take it for granted that the flight is allowed to go to its destination.
But these rules (often abbreviated to “Open Skies”, even though that bit actually just regulates flights across the Atlantic) are a construct of the European Union.
And so, if Brexit happened tomorrow, the UK would drop out of the regulatory framework and, all of a sudden, many of the flights between Britain and Europe would be grounded.
Talk to just about anyone in the airline industry and they’ll tell you that such a scenario would be so damaging to both sides that it’s almost impossible to conceive.
British passengers want to come to Europe to do business or go on holiday, and vice versa. Nobody, so the argument runs, benefits if the UK leaves the EU without some kind of refreshed airspace agreement.
But the problem is that while it may be almost impossible to imagine that scenario, it’s not actually impossible. It could happen.
The politics of the EU are Byzantine and unpredictable at the best of times, and the negotiations around Brexit will be long, complicated and full of pockets of European self-interest.
There may just be those politicians who rather like the idea of leaving British planes standing idle on the tarmac for a while.
For the British airline industry, we can divide the problem into two parts. Firstly, it’s flights that start in the UK and fly to a foreign destination – Manchester to Madrid, for example, or Heathrow to New York.
Secondly, it’s the flights that are run by a UK airline, but which fly entirely outside the UK. Let’s say, for example, from Barcelona to Paris or between Berlin and Nice. Both of those routes are offered by easyJet.
It is in order to protect these intra-European flights that easyJet has created its new company.
By having a new European operation, based in Austria, it can claim an Air Operators Certificate and that, in turn, means it can fly routes within the European Union.
This is exactly the same logic as many big banks, especially American banks, are now applying.
Like airline companies, they don’t know what regulatory framework likes ahead, and nor do they have the luxury of being able to wait and see. In fact, they have legal obligations to manage risks and make contingency plans.
In the case of banks, that means adding to their British operations by setting up subsidiaries on the European mainland, allowing them to carry on working across Europe.
Easyjet, really, has just done the same thing.
This is a tangible example of the Brexit impact, and it won’t be the last. But of all the major industries fretting about what could happen over the next couple of years, the aviation business appears to face a distinctly different set of variables.
The concept of Open Skies is so embedded into our life that we take it for granted.
The mere kernel of an idea that it could disappear, that planes could be grounded and flights to Europe might be suspended, is causing nerves and consternation.
For easyJet, perhaps the company most worried about the impact of this disruption, this quick response might look dramatic – but it also looks smart.
Source: SKY News