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Julian Bray provides: Opinion, comment, forward thinking speculation on Travel, Cruise & Aviation: conflict zones, terrorist impact, drone (UAV) issues, safety (black boxes, emergencies), airline operations, aviation finance, political implications, and all forms of incident risk. Worked at board level with several airline and aviation groups, including Alitalia, British Island Airways, British Airways, Galileo , British Aerospace, Skyways, former CEO City firm Leadenhall Assoc. Founder CNS City News Service. Director NTN Television News (joint co. with ITV Wales TWW) Debretts People 2017 and in launch edition of PRWeek Black Book.

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Friday, 21 July 2017

WHY EASYJET SPENDING SOME £10million SETTING UP A EUROPEAN AIRLINE IS A REALLY BRIGHT MOVE AND A BREXIT INSURANCE POLICY says Julian Bray




We should step back from the whole Brexit scenario and look at the dire situation the UK is in and then objectively consider how best to proceed. Julian Bray broadcaster and aviation expert writes...

The reality is that the politics involved in the Brexit negotiations is a complete and utter Horlicks and some major companies are not waiting for the politicians to mess this up or limp back from Brussels with a compromise or no deal at all, they know that if the UK is subject to World Trade Organisation [WTO] rules then everything, repeat everything, in terms of goods and services will immediately jump in price by a shocking 25percent or more, simply no one knows the real additional 'Brexit' cost on everything we do... 

Faced with this, many firms are already using their accumulated warchest financial resources - once earmarked for acquisitions - to build a secure post-brexit future, an assurance for stakeholders and jobs for employees.  

An indication of how chaotic the whole process is turning out is that we understand defeated Conservative Peterborough MP Stewart Jackson was seemingly offered a covert 'mates' deal, a job with David Davis as Chief of Staff of his Brexit Department, but now plain Mr Stewart Jackson has not so far had the job - paid for out of public funds - confirmed. Perhaps he will have to go through the interview process like everyone else? 

Airlines are particularly adept at moving vast financial assets around the world in the form of their aircraft and that is precisely what is happening to EasyJet, but its at a cost, a one off hit of some £10million. 

To get around the immediate impact of an adverse - or even no deal brexit - operationally there will now be three easyJets,  and each headquartered  in different countries - one in the UK, one in Switzerland and now a new EasyJetEurope in based in Austria.

This isn't a token operation, the airline will have its own fleet, staff and capital inventory.

But as this is a brexit workaround it is still part of easyJet's UK operations. Aircraft don't earn money by sitting on the ground so naturally as we say the airlines financial assets will be constantly crossing borders, spending little (possibly no) time  inside Austria.

As for overall strategy we are assured the major strategy will be set in  downtown Luton, however that might now all change as the EasyJet CEO, a former Guardian Newspaper Ad Sales Chief,  is jumping ship to take up a big job in television with ITV.  

Simply if easyJet, didn't put their 3 airline option in place and the UK fails to negotiate a strong exit from the EU then all their flights within Europe would be halted. Its a hardnose position from Europe and that is unlikely to change.

The UK leaving is a massive 'loss of face' for the European grandees (and a huge black hole in the EU accounts - which incidentally have not been fully audited for the last 20 years or so...)  

The fact that the UK helped totally rebuild Europe after World War II, giving the current European nations a hugely competitive post war manufacturing advantage ( ie new factories, infrastructure and so on) whilst we in the UK still using old pre-war machinery, continued to repay the US for all the armaments and war machines supplied in the late 30's early 1940's under the terms of the Lend Lease agreement. Those payments by the UK to the USA only finished about 10 years ago! Clearly the rolled-up cost of 'lend lease' should be factored into and set against any financial demand from Europe.

Even General De Gaulle who spent most of WWII safely holed up in a house in Baker Street London, then turned his back on us when he was elected President..... but then few of the current BREXIT negotiating team would ever know this!  
That might seem an unlikely prospect, but it's one that is now giving sleepless nights to plenty within Britain's airline industry.

But back to the EasyJet Europe deal, European flight permissions are part of what is generally called the  "Open Skies" agreement, although the whole agreements covers the Atlantic as well but in essence 'Open skies' are anything but, and an integral part of the European union make-up.

If Brexit was law tomorrow, many of the flights between Britain and Europe would be immediately grounded. A whole new set of rules would have to be negotiated from scratch and that is something that needs years let alone enacted overnight!

By establishing a new EasyJetEurope operation, based in Austria, it can apply to Austria and claim an European Air Operators Certificate and can operate fly routes within the European Union - as a European company located within Europe. The one-off £10million being spent by EasyJet is now looking mightily attractive.

Many large banks, mainly American owned, are now applying for European status but mistakenly heading for Paris. Anyone who currently has a business in Paris will understand the overbearing staff regulations - virtually impossible to sack employees,  and the simple fact that business Paris totally closes down in August leaving it to the tourists! 
 

JULIAN BRAY +44(0)1733 345581, Journalist & Broadcaster, Aviation Security & Airline Operations Analyst/expert, ... Travel & Holiday Guru www.aviationcomment.com,  ... http://www.freelancedirectory.org/user.php?user=8121  ... www.freelancedirectory.org?name=Julian.Bray.aviation.comment,   ... Aviation / Travel / Maritime & Cruise Industries, NUJ, EQUITY, LIVE ISDN LINK, Broadcast ISDN COOBE ++44 (0)1733 345020 ... SKYPE: JULIAN.BRAY.UK e&oe Old faithful NOKIA: 07944 217476
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