Two major low-cost carriers, Ryanair and Wizz Air, have confirmed that come January 1st, UK Shareholders will have some of their rights restricted. Both airlines are listed in London but wish to remain in line with EU-specific regulations.
As the end of the Brexit transition period is now just days away, we will undoubtedly see many more changes when it comes to flying to and from the UK. Today, Ryanair confirmed to the London stock exchange that it won’t only be passengers who will have to follow new rules and regulations. The airline has signaled that UK nationals who are shareholders will have some of the voting rights restricted.
The airline said it wouldn’t force existing shareholders to sell their shares, but they will be preventing them from voting in shareholder meetings. UK shareholders will also not be allowed to attend shareholder meetings. Hungarian carrier Wizz Air is also listed in London and has made the same changes. Last week, easyJet made a similar announcement.
EU regulations
The changes stem from the end of the transition period for the UK leaving the EU. Current EU rules state that for an airline to fly between two EU countries, it must be mainly under the control of EU citizens. Both Wizz Air and Ryanair have a majority of UK shareholders. This means that from January 1st, the airline’s ability to maintain European networks is in doubt.
Wizz Air claims that as many as 80% of its shareholders will be non-EU nationals after December 31st. Any shareholders affected by the new rules will be sent notices warning them from attending future meetings. However, the changes may not be permanent. Depending on new deal agreements between the UK and the EU, we could see these decisions reversed.
Both Norway and Switzerland are not members of the EU but have reciprocal deals with the union. Such a deal is possible for the UK. If not, major carriers such as British Airways will also face problems. IAG, British Airways parent company, is registered in Spain, meaning the famous red, white and blue of the UK’s flag carrier will actually be Spanish.
What does this mean?
However, nothing will suddenly change come January 1st. As FlightGlobal reports, a new post-Brexit agreement suggests that for the next 12 months, there will be no major changes for airlines. This is simply a way to ensure flights still happen, and things don’t grind to a halt. If a UK-based airline has an operating license and passes UK checks, it will still be allowed to operate. The same is true of EU-based airlines looking to fly to the UK.
The same text details limiting passenger flights to third and fourth freedom flights with fifth-freedom flights only possible on Cargo operations. Codesharing will continue. Leasing aircraft and crew from both EU countries and the UK will be allowed for limited durations.
Although the most recent Brexit information suggests airlines do not need to panic this week, Ryanair, Wizz Air, and easyJet are clearly preparing for the future. The plan is to renegotiate the existing agreement within a year, so although Brexit is finally coming to a close, it’s a long way from being totally over.
What do you think of the new changes? Will airlines be facing future problems thanks to Brexit? Let us know your thoughts in the comments.