Other airlines must prevent that they do not lose flight rights in the Union after Great Britain leaves the EU
Easyjet is clearly feeling the effects of the corona crisis.
The British low-cost airline EasyJet has withdrawn voting rights from the first British shareholders due to the UK's now effective EU exit. The airline informed shareholders from outside the European Union about the loss of their voting rights on Monday. Whoever bought shares last would be affected first.
Not only Easyjet, but also Ryanair, the British-Spanish aviation group IAG and the Hungarian low-cost airline Wizz, which is listed in London, must prevent them from losing their right to flights within the EU after Brexit. Because under EU law, this is only allowed for airlines that are more than 50 percent owned and controlled by EU residents.
Easyjet currently only belongs to 47.35 percent shareholders from the EU. In order to exceed the 50 percent threshold, the airline could, in a next step, force shareholders to sell their papers to investors from the EU, the company said.
Ryanair is also resorting to the withdrawal of voting rights and a purchase ban for shareholders and investors outside the EU, although according to earlier information the Irish company has more than 50 percent ownership from the EU. IAG has secured the flight rights for its Spanish subsidiaries Iberia and Vueling, as well as for Aer Lingus from Ireland, which traditionally have majority shareholders from EU countries, through agreements with Spain and Ireland. Most recently she moved the board of directors so that the majority of the members come from the EU.
It remains to be seen whether this will provide the necessary legal certainty or whether the industry-specific EU regulations on airlines will be changed. Despite plans to protect the EU license by curtailing shareholder rights, according to insiders, the EU countries concerned Spain, Ireland and Hungary campaigned for a relaxation of the rule in the Brexit negotiations in December.
Behind this is the concern that airlines from the EU could dispute the British-dominated air rights in court. According to the proposal of the three countries, British aviation shareholders should formally continue to be considered EU Europeans. The ownership rule was introduced to put an end to a sell-off of European airlines to rivals in the Gulf and Asia. The EU Commission, Germany and France had blocked the softening out of concern for Europe's autonomy in air traffic, said people familiar with the Reuters news agency. The EU Commission and the governments did not comment on this.
According to analysts, however, the legal issue will not affect air traffic in practice. Daniel Röska, an analyst at Bernstein Research, advises British airline shareholders to hold on to their investment. Since both sides have no interest in disrupting aviation, which has already been hard hit by the corona pandemic, a relaxation of the rules can be expected. In a paper, the EU agreed to review the rules.
