February 11, 2019 / 7:02 PM / in 5 months

British Airways owner IAG to cap share ownership by non-Europeans

FILE PHOTO: British Airways logos are seen on tail fins at Heathrow Airport in west London, Britain, February 23, 2018. REUTERS/Hannah McKay

MADRID (Reuters) - IAG, the owner of British Airways and Iberia airlines, said on Monday that it would cap ownership of its shares by non-Europeans at the current 47.5 percent level to maintain its status as a European-owned airline.

Britain is due to leave the European Union on March 29 but has yet to seal a withdrawal agreement, posing a potential risk to airlines that do not meet EU rules requiring European carriers to be majority-owned and operated in the bloc.

Airlines that will no longer be majority owned by EU nationals once Britain leaves the EU face the threat of losing their right to fly within the bloc after Brexit due to share ownership rules.

European Commission sources told Reuters that Brussels encouraged IAG and all airlines concerned to check with the national licensing authorities whether they would still meet the operating licence requirements in case of a “no deal” Brexit.

IAG said in a statement it would suspend the voting rights of any shares acquired by a relevant non-EU person and require the owner to sell the shares to a third party or to the airline group itself.

But IAG said that United Kingdom citizens would not be subjected to this buying cap.

IAG is registered in Spain and has its corporate headquarters in Britain. It has shareholders from around the world.

The Spanish government has said it is confident national flag carrier Iberia is a Spanish company and will be able to fly across Europe in the event of a disorderly Brexit.

Reporting by Andres Gonzalez; Editing by Ingrid Melander and Jane Merriman

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