3 Min Read
LONDON (Reuters) - The owner of British budget travel airline Jet2.com is seeking to change its company rules to control its shareholder structure and thereby protect its flying rights after Brexit, as airlines grapple with the legal ramifications of Britain leaving the EU.
Currently to operate as an EU airline carriers have to be majority owned by EU investors, but it is not clear what EU flying rights will be retained by British airlines after Britain leaves the European Union in March 2019.
Many European airlines such as Ryanair (RYA.I), IAG (ICAG.L) and Wizz (WIZZ.L) already have clauses in their articles of association that mean they can force non-EU shareholders to sell their shares in order to ensure that EU investors retain a majority.
Dart Group (DTG.L), the parent company of Jet2.com, said on Thursday it planned to change its articles of association to bring it into line with other airlines and thereby help to protect its status and flying rights as a British carrier.
Dart said it would set the permitted maximum of non-British shareholdings at 35 percent, adding it believes that currently, shareholdings by non-British nationals were below that level.
"It is not currently known what impact the UK Government's triggering of Article 50 of the Treaty on European Union and the prospect of the UK leaving the European Union will have on Jet2.com's operating rights, if any," Dart Group said in a statement.
"It may therefore be necessary to review such provisions when the regulatory landscape following Brexit becomes clearer."
European Union rules over ownership are fast emerging as a major point of contention as the aviation industry awaits further clarity on what rules for flying will look like after Brexit.
Ryanair Chief Executive Michael O'Leary earlier this week told the European Parliament that post-Brexit ownership was a "real issue", and that UK shareholders might be forced to sell shares in the Irish carrier.
At the same hearing IAG Chief Executive Willie Walsh described the ownership systems governing airlines as "arcane". Spanish-registered IAG owns British Airways, Iberia, Aer Lingus and Vueling and its shares are listed in both London and Spain.
Walsh called on governments to liberalize the rules to allow airlines to be owned by nationals of either Britain or the EU "without the need for complex ownership and control structures being put in place."
"But if it needs to be done we will continue as IAG to comply with all rules and regulations," he added.
Dart earlier reported a 14 percent fall in full-year group profits before tax, hit by investments in new Jet2.com bases at Birmingham and London's Stansted airports and foreign currency losses.
Reporting by Alistair Smout, Julia Fioretti and Victoria Bryan; Editing by Greg Mahlich