Ryanair 'will have to suspend UK flights' without early Brexit aviation deal

Ryanair has warned it will have to halt flights from the UK for “weeks or months” if Theresa May does not seal an early bilateral Brexit deal on international aviation.

The suspension of flights from Stansted and other airports was “a very distinct possibility”, the company’s chief financial officer, Neil Sorahan, told the Guardian.

He added: “In the worst-case scenario there will be no flights in or out of the UK to Europe for a period, for all carriers.

“There could be a situation where you’re going to have get comfortable with staycations for the summer of 2019: those trips down to Portugal and Spain, unless you can swim, aren’t really going to happen.”

Ryanair, a Dublin-based company, is legally allowed to operate out of the UK under a Europe-wide “open skies” regulation that allows all EU airlines and others in the “common travel area” including Morocco, Iceland, Norway and Switzerland to fly in and out of any country signed up to the pact.

The open skies policy binds EU members to regulatory oversight by the European court of justice and to freedom of movement, two red lines for the UK government in Brexit talks.

But Sorahan said that even if May changed her stance, Ryanair had to make contingency plans as the EU had said there could be no Brexit deal until all parts of the arrangement were agreed.

“Europe has been very clear in recent days that no deals are going to be put in place, they are not planning to put any special deals in place,” he said.

“If there was a cliff-edge scenario with World Trade Organisation rules and no bilateral on open skies in place, there is a distinct possibility that there will be no flights for a period of time between Europe and the UK. The impact on business would be disastrous.”

Britain is one of Ryanair’s key bases with 40 of its 400 aircraft operating out of 19 UK airports including Stansted, Glasgow and Belfast.

But the airline said it was considering abandoning flights between Scotland and Northern Ireland and the capital, owing to costs after Brexit. Ryanair believes it will have to set up a UK subsidiary with a British air operating licence (AOC) to continue the routes.

Although Sorahan did not confirm the cost, easyJet has said its own moves to obtain an EU subsidiary and licence will cost the company £10m. While easyJet would otherwise forfeit 40% of its traffic, Ryanair’s UK flights were only 2% of its business, said Sorahan. “The decision may be not to go for an AOC but just abandon UK domestic flying.”

Like all other airlines, Ryanair schedules aircraft 12 months in advance, which means it would need to know the probable regulatory regime by next March to ensure continuity.

Asked whether it was not flexible enough as a business to move planes back to the UK in the event of a last-minute deal, Sorahan said: “It would be difficult as we would have contracts with airports in Europe” months before.

The company said if it could not continue business in the UK during the weeks and months after Brexit in April 2019 it would pursue growth opportunities in Italy – where it said was now the number one carrier – Spain and eastern Europe.

It added that it was also looking at possibilities of increasing operations in Scandinavia and Germany, where it only has 20 aircraft.

Ryanair said it was talking to the Department for Transport and the Department for Exiting the European Union but that it had not been given any indication that a new open skies deal was a priority.

“Our message to Theresa May is: please make your mind up quickly and get a decision on an aviation deal and continue to keep Britain flying,” said Sorahan.

A government spokeswoman said: “Aviation is absolutely crucial to the UK’s economy and we are committed to getting the right deal for Britain. We will work closely with the international aviation community to ensure that this global industry continues to be a major success story for the UK economy.”

Few airlines share Ryanair’s worst fears. Pieter Elbers, the chief executive of Dutch national carrier KLM, which flies to 17 destinations in the UK from Amsterdam, with Britain representing almost a quarter of its European capacity, told the Guardian: “It’s a worry. The instability and uncertainty is not good for business. However, it’s premature to go into this will or won’t happen.”

Elbers said that in the worst-case scenario of no deal, KLM would keep flying to Britain. He said: “We could still operate within that 1960s bilateral agreement” which established mutual flying rights between the Netherlands the UK.

However, Brexit has already forced other airlines such as easyJet into moving aircraft to enable continuity of business.

Sorahan said Ryanair had planned to grow by about 15% in the UK last year but had instead posted growth of about 6%. “Ryanair is pivoting its growth away from the UK,” he told reporters at a briefing in London on Thursday.

“We may see that growth slow down as we get closer to the divorce negotiations coming to an end, unless we get greater certainty as to what we actually can or cannot do within Europe.”

Sorahan said the airline also expected Brexit to hit growth in both the UK and the EU, as both parties have to deal with a completely new scenario, although they had not seen that come through yet.

“The only positive, I suppose, for our customers, is that this will lead to lower fares, as we have to stimulate the market,” he said.

Ryanair meanwhile announced that customers would be able to start booking connecting flights, a first for budget carriers in Europe, starting later this month at its base in Fiumicino, Italy.

It said it expected to start fully connecting flights with other long-haul carriers, such as Norwegian and Aer Lingus, later in the year. Ryanair aded that it was also in talks to start selling tickets for other airlines worldwide, as part of a digital ambition to become what it described as an “Amazon of travel”.