EasyJet launches plans for post-Brexit base in EU

APD NEWS

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Britain's budget airline EasyJet unveiled a plan to establish a new airline, fearing profit plunge once the UK leaves the European Union.

The airline announced in a statement on Friday it would create a new division, EasyJet Europe, which will be headquartered in the Austrian capital, Vienna.

The airline intends to complete the arrangements before Britain's exit from the EU in March 2019.

This requires having a license and an air operator's certificate (AOC) in an EU member that will allow it to maintain routes between and within EU states after Brexit.

The Luton-based airline said it had applied for the license to keep flying across the EU after Brexit.

EasyJet applied for an EU license soon after the UK voted in a referendum a year ago in favor of exiting the bloc.

The process would cost 10 million pounds (13 million US dollars), mainly for the re-registering of 110 planes, said EasyJet.

"The accreditation process is now well advanced, and EasyJet hopes to receive the AOC and license in the near future," it said.

The application "will allow EasyJet to establish a new airline, EasyJet Europe, which will be headquartered in Vienna and will enable EasyJet to continue to operate flights both across Europe and domestically within European countries after the UK has left the EU," the company added.

"While the new structure will protect all of EasyJet's current flying rights within Europe, EasyJet will continue to push for the UK and EU to reach an aviation agreement which, at a minimum, will enable flights between the UK and EU."

The firm has already two divisions, one in Luton and ano in Switzerland in Geneva. EasyJet Europe will become its third division.

The British government is to activate Article 50 to formally begin the process of exiting the European Union on March 29, 2017, Downing Street announced.

It said jobs at its Luton headquarters would remain unaffected.

EasyJet said it had opted for Austria for two reasons; the country has strict implementation of European safety regulations and can handle a large number of planes

Austrian Chancellor Christian Kern hailed the announcement as "tremendous news for Austria."

"The quality of the country won in competition with 27 other European countries, not tax dumping. The better one won, not the cheaper one," Austrian Chancellor Christian Kern said in a statement.

"This is a victory that was heavily fought for, but which is all the more beautiful for Austria."

The UK's airline industry has benefited from the Single European Sky system over the last two decades. The system lifted trade restrictions on EU airlines.

British airlines could lose this status unless British negotiators manage to secure preferential conditions before the country leaves the EU.

Failure to do so will result in losing rights including being able to determine airfares freely and to start any route in the bloc without getting prior authorization.

Passengers leaving or arriving in the UK will face new taxes, and British airlines face obstacles and delays in developing new routes.

German carrier Lufthansa also has an operating license in Austria for its low-cost airline Eurowings.

German unions alleged that the firm made the plan to avoid more expensive labor market at home.

(CGTN)