March 6, 2019 / 1:33 PM / 19 days ago

Airlines can handle Brexit but frustrated by the politics, chiefs say

BRUSSELS (Reuters) - Airlines will be able to withstand the impact of Britain leaving the European Union, even without a deal, but the lack of political progress is frustrating and has dampened consumer demand, airline chiefs said on Monday.

FILE PHOTO: Willie Walsh, CEO of International Airlines Group speaks during the closing press briefing at the 2016 International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit in Dublin, Ireland June 3, 2016. REUTERS/Clodagh Kilcoyne

Britain is due to leave the European Union on March 29, and Prime Minister Theresa May has yet to seal a deal that has the approval of lawmakers in Westminster.

“I don’t think it’s concern that we’ve expressed — it’s frustration ... We do really need the politicians to resolve this,” Willie Walsh, CEO of British Airways and Iberia parent IAG, said at the Airline for Europe summit in Brussels.

“The industry manages (these uncertainties) better than any other industry ... I’m fairly confident that IAG and other airlines will be able to manage this situation whatever happens.”

Ryanair chief executive Michael O’Leary told Reuters that even if a deal is passed, it would only clinch a transition arrangement until the end of 2020, with further political instability delayed but not resolved.

“(A deal) is good news in the short term but fixes nothing over the medium term because they are still going to have to negotiate the trade deal. And what the UK government have demonstrated in the last two years is that they are incapable of negotiating the purchase of a packet of crisps,” he said.

“So short term I think the threat of a cliff edge is moving away but it is only going to be postponed for another 21 months and now we are back to the same situation all over again.”

Britain and the EU have said that flights will continue, even in the event that there is a no-deal Brexit. The EU has proposed a provisional arrangement to mitigate the impact of a no-deal Brexit on airlines, including an extra six months to meet rules requiring airlines flying within the single market to be majority-owned by shareholders from its countries.

EasyJet Chief Executive Johan Lundgren told Reuters on the sidelines of the summit that those moves were reassuring the companies that they could operate, even if ongoing uncertainty was not good for consumers.

“The uncertainty that exists around Brexit and the impact that this has on the customer is not helpful, is not good,” he said. “(But) even in the event of a no-deal, we are prepared, because we know there will be a deal on aviation.”

Reporting by Alistair Smout and Tim Hepher; Editing by Catherine Evans and Peter Graff

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