BREXIT UPDATE: UK Rejection of Withdrawal Agreement Increases Chance of No-Deal

On February 19, 2019 in Risk, Travel Policy, Travel Trends by Mike McCormick

GBTA Calls on its Members to Prepare for Brexit Uncertainties

Executive Summary

Seemingly every day new information on Brexit is coming out, yet uncertainty is greater than ever. Several votes were held recently on Tuesday, January 29, in the UK Parliament on amendments to Prime Minister Theresa May’s Brexit plan, two of the proposed amendments succeeded.  The first amendment saw Members of Parliament (MPs) voting against a no deal outcome – it is worth noting that while most MPs are against a no-deal Brexit, this amendment isn’t binding on the Government, and MPs cannot alone prevent a no-deal outcome.

The second saw MPs supporting the “Brady amendment” to reopen negotiations with the EU and which “requires the Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border. However the EU has reiterated its refusal to reopen negotiations stressing once again the need to step up preparations for a no-deal scenario.

While GBTA has stressed that a Withdrawal Agreement on how the UK will leave the EU is essential for the business travel industry. However, given these latest developments, GBTA is concerned that a “no-deal” is becoming increasingly likely as we near the Brexit date of 29 March 2019 and recommends that travel managers/buyers start conducting preparedness activities in view of assessing the impact a no-deal Brexit could have on their travelers

 

What Does a No-Deal Mean for Business Travel?

The UK and the EU have prepared a number of guidance documents to help business prepare for a no-deal scenario and GBTA calls on its members to carefully assess the impact on business travel.

 

Basic Air Connectivity

While Brexit contingency planning for the aviation sector is relatively advanced, if not properly managed, risks still exist that would undermine air connectivity and efficiency, which are critical to the business travel industry.

Aviation is one of the few areas where the European Commission and the UK Government have been forthcoming with their contingency planning.

  • The EU has committed to grant first, second, third and fourth freedom traffic rights to UK air carriers so they can continue to fly over the EU and make technical stops in EU territory, as well as serve direct routes between the respective territories.
  • These rights are only valid for 12 months as of 30 March 2019 and only if the UK reciprocates the same commitment for EU airlines. Fortunately, the UK has agreed to unilaterally grant permits to allow EU airlines to continue providing their services in the UK.

However, this basic air connectivity agreement in the case of a no-deal does not cover all aspects of the UK’s current aviation relationship with the EU.

  • No intra-EU flights: In essence, planes departing from the UK will be able to fly over the EU or into one EU country and back, but will be stopped from flying from one EU country to another. So, a UK air carrier can operate a normal flight from London to Paris but not from Paris to Madrid.
  • Uncertain third country air agreements & connecting flights: The future of the UK’s air traffic rights with third countries and the applicability of Open Skies agreements it benefits from through EU membership is also unclear. Although the UK has managed to conclude bilateral air agreements with some countries (such as the U.S. and Canada), it is unclear how many agreements with other countries the UK will be able to secure. The possibility of UK and EU carriers operating connecting flights departing from the UK is therefore uncertain.
  • Non-EU airline ownership: EU rules stipulate that carriers must be owned and controlled by more than 50 percent of EU investors in order to retain their ability to fly freely in the bloc. In a no-deal scenario, with the UK non-longer considered as an EU country, certain airlines (British Airways, Iberia, IAG) would also lose their rights to fly. It is unclear how Member States have been preparing for this scenario.
  • Unclear air traffic control systems: Additionally, in a no-deal scenario, the UK would no longer be able to directly participate in the EU’s Single European Sky (SES) initiative, which was designed to increase the efficiency of air navigation services across the EU. This could lead to flight delays for passengers.
  • Border delays: In a no-deal scenario, we can expect immediate impact on border delays: an additional 90 seconds of border checks on each passenger would translates to hours of delays disembarking any flight, and days of delays at Channel ports.

 

Visa-Free Travel for Short Stays

EU has issued a proposal to exempt UK nationals from visa requirements when travelling to EU countries. After 29 March 2019, visa-free travel between the UK and the EU would therefore continue but would only apply for short term travel (90 or 180 days).

In a no-deal scenario, if a UK citizen wants to reside or work in a EU Member State after Brexit, they would need to apply for a residence or work permit. The EU has, however, agreed to continue to grant all UK nationals legally residing in a EU Member State on 29 March 2019 the right to be considered as legal residents of that Member State without interruption (on the condition that the UK does the same for EU residents).

 

How should business travelers prepare for the upcoming uncertainty?

 

Uncertainty is the Only Certainty

The situation surrounding Brexit is still changing, with many options on the table, including extending the negotiation period to leave time for a second referendum, re-negotiating the Brexit Withdrawal Agreement or even pausing the whole exit process until further notice. With all these options to be considered for the future of the deal as well as Brexit itself, GBTA cautions its members to be prepared for the worst-case scenario.

 

Preparedness Activity

GBTA recommends that travel buyers begin to prepare through the lens of assessing the impact a no-deal Brexit could have on their travelers.

This includes:

  • Pulling a list of current and future purchased flights that may be grounded as a result of British carriers not being able to operate beyond simple in and out flights.
  • Exchanging information with airlines on the current state of their contingency planning for a no-deal
  • Pulling a pre-trip report to assess the number of potentially impacted travelers
  • Staying up-to-date on the latest developments and align with your TMC to ensure operational support in the event of a no-deal
  • Informing travelers of the potential implications of a no-deal on air travel with the UK, as well as the information above and listed below internally within the organization around the end of February:
    • Driving licenses
    • Passports
    • Mobile Roaming
    • Health

 

Area Impact
Driving Your driving license may no longer be valid by itself when driving in the EU.
You may need to obtain an International Driving Permit (IDP) to drive in the EU. An IDP is a document that when carried with your driving license means you would be able to drive outside of the UK including in EU countries. There are different types of IDP required within the EU. Which one you need depends on which country you are driving in.The IDP will cost £5.50
Passports You’ll be considered a third country national under the Schengen Border Code and will therefore need to comply with different rules to enter and travel around the Schengen area.

According to the Schengen Border Code, third country passports must: have been issued within the last 10 years on the date of arrival in a Schengen country, and have at least 3 months’ validity remaining on the date of intended departure from the last country visited in the Schengen area. Because third country nationals can remain in the Schengen area for 90 days (approximately 3 months), the actual check carried out could be that the passport has at least 6 months validity remaining on the date of arrival.

Travel to Ireland is subject to separate Common Travel Area arrangements which will be maintained after the UK leaves the EU. British nationals travelling from the UK don’t need a passport to visit Ireland.

Mobile Roaming The costs that EU mobile operators would be able to charge UK operators for providing roaming services would no longer be regulated after March 2019.

This would mean that surcharge-free roaming when you travel to the EU could no longer be guaranteed. The availability and pricing of mobile roaming in the EU would be a commercial question for the mobile operators.

However, some mobile operators (3, EE, O2 and Vodafone – which cover over 85% of mobile subscribers) have already said they have no current plans to change their approach to mobile roaming after the UK leaves the EU.

Health In the absence of a Withdrawal Agreement the European Health Insurance Card (EHIC) will cease after March 2019. The EHIC entitles you to state-provided medical treatment should you need it while visiting one of those countries.

There would be attempts to put some kind of emergency measures in place for UK citizens or to agree reciprocal deals with individual EU countries, but it is impossible to say at this point what the outcome might be.

For 10 years, Mike McCormick, with the support of a progressive Board of Directors and highly dedicated staff, has led the growth and globalization of GBTA. GBTA is now the world’s premier business travel and meetings organization with over 9,000 members representing $345B in annual travel spending. McCormick comes to GBTA with more than 25 years of travel industry experience, including leadership positions at such travel brands as Rosenbluth International, PhoCusWright and Travelport. Mike is an avid (frustrated) Philadelphia sports fan, a Notre Dame graduate (go Irish!) and a proud father of six children.

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