What effect could Brexit have on the UK's business aviation sector? TIM ROBINSON reports from a recent press briefing where some potential consequences were outlined.

Line up of bizjets at London Oxford Airport on 19 April. The airport has seen increased traffic from large cabin aircraft. (London Oxford Airport)

A leading UK business aviation figure has warned of the consequences of Brexit on the country's business aviation sector.

Speaking in a personal capacity at a pre-EBACE media briefing on 21 April, the Head of Business Development of London Oxford Airport, James Dillon-Godfray, warned that a Brexit could see G-registered aircraft and operators (and those on AOCs) migrate to EU registers/AOCs in the wake of the UK leaving.

He observed that there had been 'very little dialogue in the aviation media' about the effects of a Brexit on the aviation industry, saying: “My personal opinion is there hasn’t been enough of a dialogue within our industry about what the consequences might be should we end up leaving the EU”, adding: ‘Few pundits in the aviation sector seem to identify clear benefits for our sector.’

Airbus, for example, sent a letter to its UK employees recently that a Brexit could hurt its future investment in the UK, saying: "We simply don’t know what ‘out’ looks like."
So what are the potential effects on UK business aviation?

Possible negative effects

Bizjet exodus? Could Brexit see a migration of aircraft off the UK 'G-register'?

One possible consequence, Dillon-Godfray said was that if the economists’ predictions are correct and the value of sterling falls, that could push up aviation fuel prices (based in dollars). "That could have a dramatic effect on the price of fuel for UK operators" he observed.

Second, is that he foresees that there could well be an exodus by UK business aviation operators to EU registers and Aircraft Operator Certificate (AOC)s – to take advantages of a more beneficial oversight, cross-border simplicity and a larger market for aircraft resale and import. Employment terms, too, could be affected, he said. “There are a lot of pilots working all around Europe – working on contracts in one country and being based in a different country.” Aircraft, too, it has to be remembered, are mobile high-value assets and operators will shift them to the most beneficial regime possible.

The result (perhaps not immediately but within two-three years), he says, could be fewer business aircraft based in the UK on the G-register being overseen by the CAA.

As well as the uncertainty and ambiguity about a long-drawn out divorce with the EU another factor affecting business aviation would be the London property market – and its millionaires and billionaires who make up the core of business aviation customers, whether for business or pleasure. A stagnant or depressed property market in the global finance capital would thus have implications for these high-roller clients.

Another unknown, explained Dillon-Godfray, would be the 42% of UK domestic business flights (over 6,000 in 2015) that are flown by non-UK registered jets on Non-UK AOCs. Post-Brexit – will there be cabotage (transport between two places in one country by another country’s operator) problems with these flights?

He also noted that only 5% of transatlantic business aviation flights between the US and UK are by G-registered jets – which has implications for Open Skies agreements. Would these need to be renegotiated?

Finally, he cautioned Brexit would probably mean the UK remaining in EASA – and thus being under the same oversight and aviation legislation rules as EU members. (But without any high-level ministerial ability to influence or guide regulations). “I don’t think that there will be any opportunity to cherry-pick and have an EASA-lite” said Dillon-Godfray.

Could there be benefits?

UK MROs could potentially see increased business if the value of sterling falls. (London Oxford Airport)

However, while Dillon-Godfray warned of a potential migration of UK aircraft and operators to EU jurisdiction there could be some advantages. If exchange rates are affected, he observed, then UK business aviation MROs could see a boost in business if they are cheaper than rival EU maintenance facilities.

Conversely, if post-Brexit, the City of London developed into an 'offshore' style refuge for funds, individuals and companies – then the UK's 'G-register' for business jets could be of interest to certain clients.

Another speaker at this pre-EBACE briefing from Capital Air Services also highlighted a possible benefit to his business from Brexit – that of avoiding excessive EU regulation. His business, providing VIP helicopter shuttles has been affected by an EASA rule on the multi-crew cockpits (MCC) license, which means for his mainly single-pilot IFR operations it can take up to six years for a highly experienced pilot to build up enough hours. The ruling, aimed at the offshore helicopter industry, has thus had a negative effect on the VIP/corporate business aviation sector- ‘onshore it is a hinderance’ he said.

Could then a Brexit allow the UK to selectively adopt (or not adopt) EASA regulations to avoid stifling red tape on business aviation? Perhaps not, without a full and complete withdrawal from EASA - which would have immense implications for aviation safety, UK airlines and the British aerospace industry as whole.


Not all doom and gloom at Oxford

A new fast rail link between Oxford and central London is benefiting the airport. (London Oxford Airport)  

However, while Dillon-Godfray revealed his personal concerns over the possible effects of Brexit on the UK business aviation sector, he was upbeat in other predictions for London Oxford Airport. It is now the sixth busiest business aviation airport on the mainland UK with 8,000+ passengers per year, and the fourth busiest FBO. And while business aviation flights have fallen slightly in the UK and Europe, the past three months have seen London Oxford register growth of 8.3%, the second fastest growing UK bizav airport after Biggin Hill and the eighth fastest in the EU. Interestingly this traffic growth is from bigger business jets, like the Gulfstreams and Bombardier Globals – says Dillon-Godfray.

New transport links may have helped this rise – a new one hour rail service from London Marylebone station to Oxford Parkway which opened last October.
Oxford has also benefited from its current owners also owning London Heliport, which has opened up 'interlining' business transferring passengers direct into London by helicopter.

The airport, too, is also enhancing its services and facilities such as new X-ray security systems, a seven-day radar service as well as becoming one of the first UK FBOs to receive International Standard for Business Aircraft Handling (IS-BAH) accreditation. New tenants have also arrived at Oxford – the latest being flight training school Airways Aviation which opened a global HQ in March.

Future opportunities

Could Bombardier's new CSeries open up transatlantic all-business flights for smaller UK airports? (Bombardier) 

Whatever the outcome of Brexit, Dillon-Godfray also identified two other growth opportunities for UK business aviation. The first is the introduction of Bombardier's CSeries airliner, set to enter service with Swiss this summer. The outstanding shortfield performance (4,000ft) of the CSeries, says Dillon-Godfray, opens up a whole new business niche of direct all-business flights to the US from smaller regional airports such as Oxford (with a 5,000ft runway). While British Airways currently operates an Airbus A318 from London City, this stops in Shannon, Ireland, for US-customs pre-clearance and fuel. A CSeries service would be able to make the flight in one hop. Transatlantic all-business services are, of course, not a new idea, it has to be said, but the combination of the CSeries’ shortfield performance, range and new efficiencies for this smaller airliner may interest some entrepreneurs.

New commercial single-engine IFR rules too, set to be introduced in Europe later in the Autumn, could also be a boon for London Oxford Airport and, indeed, the wider UK business aviation community. This change, already permitted in the US, Canada and Australia, allows single-engined turbine types such as the Cessna Caravan and Pilatus PC-12, to be operated commercially, opening up cheaper short corporate and charter flights. Indeed, Dillon-Godfray estimates that a 12-seat Cessna Caravan on journeys around 200miles could often be cheaper than the UK's expensive rail tickets on a seat-mile per cost basis. Could these regulations lead to a boost for the UK’s regional and smaller airports?

Summary

Single engine ops could provide exciting opportunities for UK business aviation. (Textron Aviation)

This may have been personal views from an airport executive - but they do highlight some previously unspoken concerns of part of the UK business aviation community over the potential impact of a UK withdrawal from the EU.

Like it or not, Britain's business aviation sector is closely tied into Europe via regulations, trade and free movement among others. The difficulty of untangling some of these is at present therefore unknown – although Dillon-Godfray admitted: "My gut feeling is it will be a pain".

While in the end, this will be a decision for the British public, it is clear that some sectors of UK aviation could see wider consequences "Our industry could be affected in a number of radically different ways" said Dillon-Godfray.


26 April 2016