US-UK bilateral aviation talks could provoke post-Brexit rethink

Before the UK leaves the European Union, it will have to negotiate a new bilateral air service agreement with the rest of the bloc in order to ensure traffic rights for its airlines. It must also negotiate new bilaterals with 17 non-EU countries where rights are currently granted under EU agreements.

The most important of these extra-EU agreements will be a new UK-US deal, necessary once the UK falls out of the EU-US open skies agreement. After the EU (and other members of the ECAA), the US is the UK's second most important aviation market by seats and ASKs. Apart from the internal European aviation market, the current EU-US open skies agreement, to which the UK is a party, is one of the world's most liberal international air services agreements.

This provides a helpful backdrop to US-UK negotiations, but there are also powerful US aviation interests that have resisted liberalisation (for example, the opposition to the Gulf airlines and to Norwegian's Irish and UK subsidiaries). Nobody wants a return to the old Bermuda II UK-US agreement, but complexities such as nationality clauses may challenge the negotiators. The time is ripe for a rethink of the whole bilateral system.