http://www.dailymail.co.uk/wires/reuters/article-4695906/Britains-easyJet-picks-Austria-EU-air-operator-certificate-Brexit.html

So they will create a new airline easyJet Europe that will be based out of VIE to enable the continuation of intra EU flights. This will bring the groups airlines to 3

easyJet UK
easyJet Europe
easyJet Switzerland

U2 going for a EU AOC was pretty much a given, the only question was which country they would choose.

I wonder if Austrian labor laws have anything to do with it - it has also been the country of choice for the Eurowings Europe AOC, which seems too much of a coincidence. Are labor laws in Austria looser than in other EU countries, and thus more LCC-friendly / employee-unfriendly?

Austria seems the new home for LCC-airlines, after Eurowings EUROPE now easyJet.

Any idea, why easyJet didn't followed the "Ireland" (low tax) trend - like SAS, Norwegian etc.? Or the flag of convenience trend for Malta?

r2rho wrote:

U2 going for a EU AOC was pretty much a given, the only question was which country they would choose.

I wonder if Austrian labor laws have anything to do with it - it has also been the country of choice for the Eurowings Europe AOC, which seems too much of a coincidence. Are labor laws in Austria looser than in other EU countries, and thus more LCC-friendly / employee-unfriendly?

easyJet employ based on local labor laws so doesn't make much of a difference.

easyJet didn't go into much detail regarding why Austria was chosen over say Ireland or Malta.

Was expecting them to choose Ireland, but nonetheless there's their EU AOC.

r2rho wrote:

U2 going for a EU AOC was pretty much a given, the only question was which country they would choose.

I wonder if Austrian labor laws have anything to do with it - it has also been the country of choice for the Eurowings Europe AOC, which seems too much of a coincidence. Are labor laws in Austria looser than in other EU countries, and thus more LCC-friendly / employee-unfriendly?

Eurowings did it because of labour-tariffs.

But there are other probable causes. For example:
"According to the Austrian VAT Code, the supply, modification, re- pair, maintenance, chartering and hiring of aircraft that are deter- mined to be used by airlines operating for reward mainly on interna- tional routes or outside of Austria is exempt from Austrian VAT on importation."

There are a couple of international companies flying planes with austrian registry. For example TNT Belgium ( especially ASL Airways). Or Lease-corporations for parked airliners (I have seen that for example with Air Lease Corp., I think last year).

Brixerl wrote:

r2rho wrote:

U2 going for a EU AOC was pretty much a given, the only question was which country they would choose.

But there are other probable causes. For example:
"According to the Austrian VAT Code, the supply, modification, re- pair, maintenance, chartering and hiring of aircraft that are deter- mined to be used by airlines operating for reward mainly on interna- tional routes or outside of Austria is exempt from Austrian VAT on importation."

There are a couple of international companies flying planes with austrian registry. For example TNT Belgium ( especially ASL Airways). Or Lease-corporations for parked airliners (I have seen that for example with Air Lease Corp., I think last year).

In most EU countries there is a VAT exemption for commercial operators with an AOC.

Good morning.
Long time follower of this site, my first post.
According to the portuguese press (Portugal was trying to get Easyjet EU registered there) easyjet was asking for an exception so that the planes would be registered in Pt but the supervision authority would remain in the UK. Registered in one country, but regulated in another, according to this article (sorry, only in portuguesee).

http://www.dn.pt/dinheiro/interior/port ... 32905.html

Portuguese authorities refused.
Don't know if Austrian authorities accepted.

My 2 cents
pedrinch

mooseofspruce wrote:

Was expecting them to choose Ireland, but nonetheless there's their EU AOC.

No direct easyJet flights to Ireland migth have ruled it out...

It might have a lot to do with Austrocontrol (the Austrian aviation authority) being a fairly reasonable and professional outfit.

pedrinch wrote:

Good morning.
Long time follower of this site, my first post.
According to the portuguese press (Portugal was trying to get Easyjet EU registered there) easyjet was asking for an exception so that the planes would be registered in Pt but the supervision authority would remain in the UK. (...) Portuguese authorities refused.
Don't know if Austrian authorities accepted.

My 2 cents
pedrinch

Official statement of Austro Control:
"In the case of an AOC being issued to Easyjet, Austro Control would be responsible for the permanent oversight of the new airline. In concrete terms the authority would perform regular audits and inspections, as is the case with all other national carriers on the Austrian register, such as Austrian, NIKI or Eurowings Europe. Flight inspectors would primarily focus on operational and technical aspects as well as the maintenance of the fleet, the same as with any other Austrian Airline."

More to to that from Austro Control:
https://www.austrocontrol.at/en/company ... ro_control

And from Easy Jet (via reuters):
EasyJet said it will re-register 110 planes to fly under the new AOC and that it planned to complete this process before Britain leaves the EU.

Edit: Fleet size Easy Jet 252 (132 A319s and 120 A320s). On order 4 (A320s). Source: Planespotters.

So here it goes, another company prepared itself or a hard Brexit.

Dutchy there is no such thing as a hard brexit, a "soft brexit" is a desperate attempt by remoaners to keep us in the EU by any other name contrary to a democratic vote. There is only Brexit which will have problems and bumps in the road but none of the hysterical end of the world prophecies of our elite have come to pass. Life is not all about economics. nor is politics.

There will be Brexit, easyJet will have a decent contingency and life will go on much as before with the exception that Britain will not be part of the EU leaving the EU to move towards a closer union the UK could never be part of. If it wasn't for the fact we are a major net contributor into the coffers of the EU, they would be thanking us.

Well said Skipness, this hard/soft Brexit phrase pi55es me off!

According to the following links, first OE registered plane could be on the 20th of July. Very quick if that's the case.


Kurt Hofmann‏ @atterseeluftfah

It is expected that more then 100 @easyJet @Airbus A320s will get "OE" registration @A4Europe @IATA @viennaairport

https://twitter.com/atterseeluftfah/sta ... 1853458432

Kurt Hofmann‏ @atterseeluftfah

The first "OE" registered @easyJet @Airbus A320 expected to land @viennaairport Thursday July 20 l @austro_control

https://twitter.com/atterseeluftfah/sta ... 2737637376

What will be the impact in UK economy? Jobs, taxes, etc.

What will be the impact in UK economy? Jobs, taxes, landing fees, etc.

ro1960 wrote:

What will be the impact in UK economy? Jobs, taxes, etc.

Jobs: U2 employs 9000 people (I couldn't find a number of U2 employees in UK).

For comparison: LGW has 24'000 employees, of which 25% are cabin crew. Directly employed by the airport are 2800.

If I understand the 2016's U2 financial report right, they paid 68 million £ in taxes.


David

skipness1E wrote:

Dutchy there is no such thing as a hard brexit, a "soft brexit" is a desperate attempt by remoaners to keep us in the EU by any other name contrary to a democratic vote. There is only Brexit which will have problems and bumps in the road but none of the hysterical end of the world prophecies of our elite have come to pass. Life is not all about economics. nor is politics.

Hard Brexit is widely taken to mean leave EU, no customs union, no single market, and (for our purposes) no open skies
Soft Brexit is widely taken to mean leave EU, but retain customs union, single market and open skies

There are many other agreements and associations such as fisheries, atomic, universities etc.. so it runs much much further than just the above of course.

The referendum, let us remind ourselves was on the EU part and not the many other various other parts. Even Boris Johnson said during the Brexit campaign, and immediately after that he wanted to remain in the single market (but may have since changed his tune!).

There is much to consider and negotiate to ensure as little harm to the UK as possible, which may include retaining some of the agreements currently in force, and retaining open skies is part of the softer brexit approach.

From easyJet's perspective, a new EU operation will of course also enable them to funnel profits outside of the UK if preferential for them to do so, so some flexibility here may help.

I would have thought that political stability is a big part of the decision, as they will want to ensure a stable tax and legislative environment for the new company longer term, so maybe Austria is a good call from that perspective.

Brixerl wrote:

And from Easy Jet (via reuters):
EasyJet said it will re-register 110 planes to fly under the new AOC and that it planned to complete this process before Britain leaves the EU.

Edit: Fleet size Easy Jet 252 (132 A319s and 120 A320s). On order 4 (A320s). Source: Planespotters.

Planespotters missed the outstanding orders for 98 A320neo (they ordered 100, the first two have arrived) and 30 A321neo

flyingturtle wrote:

ro1960 wrote:

What will be the impact in UK economy? Jobs, taxes, etc.

Jobs: U2 employs 9000 people (I couldn't find a number of U2 employees in UK).

For comparison: LGW has 24'000 employees, of which 25% are cabin crew. Directly employed by the airport are 2800.

If I understand the 2016's U2 financial report right, they paid 68 million £ in taxes.


David

Thanks for digging out those figures. I imagine some of it will benefit the EU or Austria and no longer the UK.

Why not Netherlands just across the English Channel?

ro1960 wrote:

flyingturtle wrote:

Thanks for digging out those figures. I imagine some of it will benefit the EU or Austria and no longer the UK.

Yes, Austrian AOC / easyJet Europe will be for the benefit of the EU, and detriment to the UK.

There's no guarantee that this will work out . Air France and Lufthansa will probably argue that its just a scam to allow a British airline to have its cake and eat it after Brexit . And to be fair it does look like a scam ... Brexit means Brexit , out is out , they should lose their intra European flying rights

The thing I do not get here is the following: Norwegian, Icelandair and Swiss have AOC's in countries that are not EU, however EEC. They are subject to the rights as EU carriers with regards to freedoms of the air, EU-US open skies etc.

What will happen in the UK market?. Is it just Brexit or are they also not wanting EEC or anything like that which will lead to isolation? and the need to re-establish bilateral agreements with each country.......which will lead to higher prices again.

Somebody please explain

Galwayman wrote:

There's no guarantee that this will work out . Air France and Lufthansa will probably argue that its just a scam to allow a British airline to have its cake and eat it after Brexit . And to be fair it does look like a scam ... Brexit means Brexit , out is out , they should lose their intra European flying rights

EasyJet is arguing that 50%+1 of their shares are owned by EU nationals, which is a requirement to operate an airline inside the EU market.
The only sketchy thing is that they mantain the holding company can still be located in the UK.
I wouldn't be surprised if, in the end, EasyJet Europe+Switzerland is spun-off or the company is inverted (i.e. EasyJet Europe will be the head corporation). The weird thing is that Austria has a 25% corporate tax rate, which is double Ireland's 12.5%.

Galwayman wrote:

There's no guarantee that this will work out . Air France and Lufthansa will probably argue that its just a scam to allow a British airline to have its cake and eat it after Brexit . And to be fair it does look like a scam ... Brexit means Brexit , out is out , they should lose their intra European flying rights

It is much more complicated than that. First question is to figure out what constitutes an EU airline in terms of ownership. Current easyJet PLC investors that are based in the EU i.e. pension plans, mutual funds, asset managers, insurance companies, etc. can become the anchor EU investors of easyJet Europe so that it qualifies as an EU airline. The founder of easyJet is Greek. I know he had some issues with the company but maybe he is still a large investor.

In terms of an economic impact on the UK, it depends on the current labor mix - EU vs UK and work regulations post-Brexit. My guess is that UK-based flight attendants will not be allowed to work at the EU version of easyJet. For pilots, it would be even trickier as there would be additional licensing issues. Will EASA in the future accept UK CAA licenses even if UK pilots are given the right to wok in the EU?

It's a sad state of affairs that a carrier would have to maintain 3 AOCs to fly within Europe. This could be solved with the stroke of a pen granting open and reciprocal rights between and among the respective jurisdictions.

TigerFlyer wrote:

It's a sad state of affairs that a carrier would have to maintain 3 AOCs to fly within Europe. This could be solved with the stroke of a pen granting open and reciprocal rights between and among the respective jurisdictions.

But the UK wants to be independent of the EU institutions so granting reciprocal rights has no impact in that respect.

VS11 wrote:

TigerFlyer wrote:

It's a sad state of affairs that a carrier would have to maintain 3 AOCs to fly within Europe. This could be solved with the stroke of a pen granting open and reciprocal rights between and among the respective jurisdictions.

But the UK wants to be independent of the EU institutions so granting reciprocal rights has no impact in that respect.

Australia and New Zealand are independent countries yet granted open and reciprocal traffic rights to fly within and about each other's territories. A diplomatic fix is certainly possible.

TigerFlyer wrote:

VS11 wrote:

TigerFlyer wrote:

It's a sad state of affairs that a carrier would have to maintain 3 AOCs to fly within Europe. This could be solved with the stroke of a pen granting open and reciprocal rights between and among the respective jurisdictions.

But the UK wants to be independent of the EU institutions so granting reciprocal rights has no impact in that respect.

Australia and New Zealand are independent countries yet granted open and reciprocal traffic rights to fly within and about each other's territories. A diplomatic fix is certainly possible.

Sure, in Europe this diplomatic fix is currently called European Union.

VS11 wrote:

TigerFlyer wrote:

Sure, in Europe this diplomatic fix is currently called European Union.

EU sounds like a grand idea - lets do that! (if only we could!)

VS11 wrote:

Sure, in Europe this diplomatic fix is currently called European Union.

Agreed, that would be the ideal. But since that's not going to happen, there's nothing preventing a multilateral aviation agreement. Well, apart from bitterness between the divorcing parties, and the desire to provide business and employment among the respective CAAs. Unfortunately this raises the cost of providing service and ultimately the prices paid by consumers.

Galwayman wrote:

There's no guarantee that this will work out . Air France and Lufthansa will probably argue that its just a scam to allow a British airline to have its cake and eat it after Brexit . And to be fair it does look like a scam ... Brexit means Brexit , out is out , they should lose their intra European flying rights

The majority ownership will be by EU nationals. Stellios (and his family) (a greek cyrpriot) still owns 33% themselves.

skipness1E wrote:

Dutchy there is no such thing as a hard brexit, a "soft brexit" is a desperate attempt by remoaners to keep us in the EU by any other name contrary to a democratic vote...

There will be Brexit, easyJet will have a decent contingency and life will go on much as before

Skipness mate, this is contradictory. If things do 'go on much as before' as I very much hope that they do, then we will have had a soft form of Brexit. That's because, as we all know, the massive expansion of intra-European air services over the last few years has happened under the umbrella of EU aviation policies, for better or worse. For things to carry on as they were before, we will have to reach a compromise with the EU over our membership of the open skies area - which will by definition be a softened form of Brexit.

If, by contrast, we have a hard Brexit, then we revert to bilaterals which have nothing like the capacity to accommodate current traffic levels from the UK to the EU. So things cannot go on as they were before.

There are so many cliches out there about 'elites' and 'project fear' and 'remoaners' but sooner or later Brexiteers will have to stop resorting to these every time they are faced with a difficult reality. I'm not an elite and weirdly I'm also not a remoaner. Im just someone who wants to have an open debate about the future without tired cliches, and someone who accepts that if we have a hard Brexit then things cannot and will not go on as normal.

Brixerl wrote:

And from Easy Jet (via reuters):
EasyJet said it will re-register 110 planes to fly under the new AOC

That will keep the registration spotters busy for a while. I suppose the aircraft itself will not move to an Austrian base and just keep flying from airports all over Europe?

MartijnNL wrote:

Brixerl wrote:

And from Easy Jet (via reuters):
EasyJet said it will re-register 110 planes to fly under the new AOC

That will keep the registration spotters busy for a while. I suppose the aircraft itself will not move to an Austrian base and just keep flying from airports all over Europe?

Exactly... just as the G- reg ones do across europe now.

Galwayman wrote:

There's no guarantee that this will work out . Air France and Lufthansa will probably argue that its just a scam to allow a British airline to have its cake and eat it after Brexit . And to be fair it does look like a scam ... Brexit means Brexit , out is out , they should lose their intra European flying rights

This will work out if Easyjet plays it by the rules. No letterbox/shellcompany, majority of ownership by EU nationals....

Hmmm

I think Air France and Lufthansa will go for IAG first , BA will most likely be asset stripped and then dumped

And then they'll go for easyJet unless most of its shareholders are EU nationals at that stage and the HQ and majority of staff are within the EU

Just opening a base in Vienna isn't going to work

Galwayman wrote:

Hmmm

I think Air France and Lufthansa will go for IAG first , BA will most likely be asset stripped and then dumped

And then they'll go for easyJet unless most of its shareholders are EU nationals at that stage and the HQ and majority of staff are within the EU

Just opening a base in Vienna isn't going to work

It won't be just a base. They call it the HQ for their european operations. If they stick by the rules, no chance for Lufti to "go for them".
Let's see what happens with the UK HQ. Running 2 OP departments isn't cheap.

Galwayman wrote:

Hmmm

I think Air France and Lufthansa will go for IAG first , BA will most likely be asset stripped and then dumped

And then they'll go for easyJet unless most of its shareholders are EU nationals at that stage and the HQ and majority of staff are within the EU

Just opening a base in Vienna isn't going to work

Nope, the interesting thing is, what will the UK do? Does it mandate that any UK airline has also 50% + 1 ownership? Then IAG and Easyjet, TUI etc. are all in trouble, will they all break-up? With a new AOC, Easyjet hasn't ticked all the boxes yet.

ExDubai wrote:

Galwayman wrote:

Hmmm

I think Air France and Lufthansa will go for IAG first , BA will most likely be asset stripped and then dumped

And then they'll go for easyJet unless most of its shareholders are EU nationals at that stage and the HQ and majority of staff are within the EU

Just opening a base in Vienna isn't going to work

It won't be just a base. They call it the HQ for their european operations. If they stick by the rules, no chance for Lufti to "go for them".
Let's see what happens with the UK HQ. Running 2 OP departments isn't cheap.

And if Lufthansa does try, even when easyjet has the HQ for easyjet europe in vienna, easyjet has a excellent argument: Lufthansa does the same within the EU with Eurowings europe in Vienna. Both have their european arm headquartered in austria.

The thing I do not get here is the following: Norwegian, Icelandair and Swiss have AOC's in countries that are not EU, however EEC. They are subject to the rights as EU carriers with regards to freedoms of the air, EU-US open skies etc.

What will happen in the UK market?

I expect that, mid term, the UK will have some sort of agreement like Norway has. But not from day 1. Things will likely revert to bilaterals at first, then the open skies would be negotiated. In the meantime, it'll be messy, to put it mildly. In that case, U2 will be partially prepared with the new AOC, though that's not all that is needed.

In the other case, which is the UK having open skies with the EU from day 1, U2 will have an AOC in a country with what it seems are LCC-friendly labor laws, and can shift some workforce to the lower cost structure.

In both cases, a win for U2.

Nope, the interesting thing is, what will the UK do? Does it mandate that any UK airline has also 50% + 1 ownership? Then IAG and Easyjet, TUI etc. are all in trouble, will they all break-up? With a new AOC, Easyjet hasn't ticked all the boxes yet.
Many happy landings, greetings from The Netherlands!

Irrelevant what the UK do , they're inconsequential here . Can't see the commission falling for this crap

I wonder if the safety briefings will have to be carried out in German? Not a requirement everywhere but might be the case with Austria.

According to news outlets EasyJet Europe will have 4,000 employees, those jobs will not be in the UK. So there clearly is an impact on the UK.

Brixerl wrote:

And if Lufthansa does try, even when easyjet has the HQ for easyjet europe in vienna, easyjet has a excellent argument: Lufthansa does the same within the EU with Eurowings europe in Vienna. Both have their european arm headquartered in austria.

No, that is not an excellent argument, it is wrong. Lufthansa can have an Austria-based subsidiary because both countries are in the EU. The parent company is in Germany (EU member), the subsidiary in Austria (also EU member) - so no problem whatsoever. EasyJet on the other hand has its parent company in the UK, a country that has just decided to no longer wanting to be a member of the EU, so they should stay out and not get those same rights. It doesn't matter that the parent company is majority-owned by EU shareholders as long as it is based in the UK and owns 100% of the Austrian subsidiary. It would be a different story if there was a separate shareholder structure for EasyJet Europe, with the majority of owners being in the EU. In that case, no problem.

With banks and insurance companies moving (sometimes significant) parts of their operations to the EU, creating companies in the EU to continue to have passporting rights, with EasyJet setting up a European operating company activity is moving away from the UK - things seem to be changing. There was a delegation from the City of London in Brussels the other week lobbying to continue passporting rights for London-based banks and insurers. I am glad to hear that they've been told that they can forget about that, should have thought about that before voting to leave the EU. The same should apply to aviation and other markets. Even if some in the UK want a "soft" Brexit with continued access to the common market, the EU should not allow that. Seems that a number of politicians have understood that and since started to negotiate new bilateral trade agreements. Philippines is a huge win, congratulations.

Everyone on here just seems to think cross boarder Business ownership is going to cease after Brexit.

Big firms always find ways round things.

As others have said, getting an EU AOC is a necessary, but not sufficient, condition for U2 to continue EU ops.
The other condition is 50%+1 EU ownership, and that may need to be sorted out. Easyjet Switzerland is 49% owned by U2, 51% by private investors. I could imagine a similar setup for an "Easyjet Europe", based in Austria, 49% owned by Easyjet UK, 51% owned by EU investors.

Arion640 wrote:

Everyone on here just seems to think cross boarder Business ownership is going to cease after Brexit.

Big firms always find ways round things.

Of course it won't. But it won't be as free anymore between Britain and the rest of Europe as it is now. Today, an investor from the U.K. is not considered a foreigner. In the future, that won't be the case. It will be more like the rules governing ownership between for instance the UAE and Europe (guess why Etihad or Delta can't buy as much of an airline as they would like) or Europe and the US ( A foreign airline cannot own more than 25% of an airline in the United States). EasyJet, which is a British and thus a "foreign" airline, cannot own the controlling majority of EasyJet Europe. There is no way around it as you say.

I am not saying that this is good or bad. I am saying that it's different from today and pretending that it's not and that brexit won't change things is naive and/or ignorant if the facts.