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VS11
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Bermuda III If Brexit Happens

Wed Apr 06, 2016 3:48 am

The thread about Airbus warning in the event of Brexit got me thinking about Open Skies implications. Would Bermuda II be in effect if Britain were to leave the EU? Or would a new agreement be negotiated? I wonder what the provisions will be in a Bermuda-III. Will access to LHR be limited to only 2 US carriers? Will AA and UA be grandfathered? Interesting times...
 
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TWA772LR
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 3:58 am

I don't think it would have any effect on US carriers. The UK and the US have their own Open Skies agreement. I can see the European carriers moving to their own terminal and a terminal reshuffling of the airlines by region rather than alliance at LHR, and a lot of the smaller EU carriers moving to the other London airports.
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kiwiandrew

RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:08 am

Quoting TWA772LR (Reply 1):
The UK and the US have their own Open Skies agreement

That is not my understanding, I believe the current agreement is an Open Skies agreement between the EU and the US.

http://en.wikipedia.org/wiki/EU%E2%80%93US_Open_Skies_Agreement

However, the current agreement also includes some non-EU members ( for example, Switzerland and Norway) so presumably the UK could try to negotiate to remain in the agreement even if they leave the EU.
 
VS11
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:11 am

Quoting TWA772LR (Reply 1):
I don't think it would have any effect on US carriers. The UK and the US have their own Open Skies agreement.

Not quite the case. The bilateral air service agreement between the US and the UK, called Bermuda II, was replaced by the EU and US Open Skies agreement. US and UK carriers will be affected in the event of Brexit. The question is how.
 
VS11
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:15 am

Quoting kiwiandrew (Reply 2):
However, the current agreement also includes some non-EU members ( for example, Switzerland and Norway) so presumably the UK could try to negotiate to remain in the agreement even if they leave the EU.

Good point. But would the UK want to continue to allow unrestricted access to LHR for the US carriers? I have always thought that BA and VS suffered from the increased competition.
 
a380787
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:23 am

Quoting vs11 (Reply 4):

They also gained the JVs in exchange, so net net is still likely a win for them. Even if Brexit is real, I don't see how anyone wants to revert back to the dark ages of Bermuda II.
 
kiwiandrew

RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:29 am

Quoting a380787 (Reply 5):
They also gained the JVs in exchange, so net net is still likely a win for them. Even if Brexit is real, I don't see how anyone wants to revert back to the dark ages of Bermuda II.

Agree, it would be a very unwise move in my opinion to try it. Both VS and BA would have a lot to lose from a reversion to the old agreement.
 
a380787
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:35 am

Quoting kiwiandrew (Reply 6):

Well, UA might be happiest in that scenario though, since they're the ones lacking a LHR JV.
 
VS11
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:36 am

Quoting a380787 (Reply 5):
They also gained the JVs in exchange, so net net is still likely a win for them. Even if Brexit is real, I don't see how anyone wants to revert back to the dark ages of Bermuda II.
Quoting kiwiandrew (Reply 6):
Agree, it would be a very unwise move in my opinion to try it. Both VS and BA would have a lot to lose from a reversion to the old agreement.

I am ready to question if the JVs generate more money for BA and VS. Those A380s VS ordered were ordered for a reason.
 
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LAX772LR
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:54 am

Quoting a380787 (Reply 7):
Well, UA might be happiest in that scenario though, since they're the ones lacking a LHR JV.

And the one with the least amount of hubs that would be affected.  


Quoting vs11 (Reply 8):
Those A380s VS ordered were ordered for a reason.

What reason is that? Pride? Overestimation of market growth? Failure to see market trends?
I myself, suspect a more prosaic motive... ~Thranduil
 
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mercure1
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 5:06 am

Nothing will happen.

David Cameron has already said the UK would honor all its treaty obligations with 3rd parties.
The vote is to disassociate with the EU, not scrap every agreement the UK is part of.

Anyhow even if vote to exit were to pass, it would be an extremely complex long term process and minor detail like aviation treaty is not going to be very high on list of things to worry about for the government.
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masseybrown
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 5:11 am

I'd guess the US and UK would quickly write a bilateral open skies agreement; it's the path of least resistance. The US could then pat itself on the back for minimizing regulations and the UK could still rigidly control access to London through slots. Slot control is probably as effective as protectionist treaties ever were and has the added feature of deflecting any blame from the government to the infrastructure.
 
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 5:29 am

Quoting kiwiandrew (Reply 2):
That is not my understanding, I believe the current agreement is an Open Skies agreement between the EU and the US.

Legally, the EU-US Open Skies agreement is a series of agreements between the US and all 28 EEA member stated. (EU + Norway, Iceland and Liechtenstein).

The countries of the EEA have agreed that the European Commission is allowed to negotiate bilateral ASA's on their behalf. They have also committed to honor the agreements made bij the EC and to implement this in local law.

The main difference between the EEA and EU here, is that EEA countries only commit to laws regarding international trade (and not foreign policy, social affairs, etc).

If the UK would leave the EU, they would still have this agreement with the US.

And even if the wouldn't, the UK would be foolish to upset their largest single trade partner after just breaking the ties with their largest group of trade partners.
 
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 7:33 am

Quoting TWA772LR (Reply 1):
I don't think it would have any effect on US carriers. The UK and the US have their own Open Skies agreement. I can see the European carriers moving to their own terminal and a terminal reshuffling of the airlines by region rather than alliance at LHR, and a lot of the smaller EU carriers moving to the other London airports.

Why would any airline move ? The UK is not a Schegan country, all international( including EU) go through customs. Recently there have been various posts on this board about all kinds of airlines moving at Heathrow, does any one really think any Star alliance airline is moving from the new T2 ?

Some on suggested all flights to the USA go from one terminal with a US FIS ? The Brits would really love that.

Would BA move from their new and gorgeous Terminal 5 ? Not likely.
 
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Aesma
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 9:07 am

Quoting a380787 (Reply 5):
They also gained the JVs in exchange, so net net is still likely a win for them. Even if Brexit is real, I don't see how anyone wants to revert back to the dark ages of Bermuda II.

Well isn't Brexit all about taking back control and closing borders ?
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VS11
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 12:04 pm

Quoting MasseyBrown (Reply 11):
'd guess the US and UK would quickly write a bilateral open skies agreement; it's the path of least resistance.

Seems to me reverting to the pre-existing agreement would be the easiest action to do. It is protectionist in spirit but so is Brexit. After all, if the British interests are better served by controlling somewhat the foreign competition at LHR, the UK has the right to do it. Why bother with the disruptive 3rd runway at LHR just to accommodate more carriers?
 
vv701
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 1:17 pm

I would have thought that the only possible impact on commercial aviation of Brexit would be on EC (Openskies).

However if EC's operations were impacted I suspect that a quick solution would be found. After all as far as I know it has operated French registered aircraft with a French AOC for many years. Nevertheless EU law does require that ownership of an EU airline must be at least 50 per cent EU based.

I do not think that IAG which would have airlines based both in and out of the EU would be affected. Its structure already ensures that, for example, BA can continue to operate under bilateral agreements made between the UK and other non-EU nations where there are no agreements between the EU and those nations. Similarly IB can operate under agreements made by Spain .

Some have suggested that the UK will be keen to reimpose Bermuda 2 type restrictions in the event of Brexit. In practical terms with the antitrust immunity agreements I cannot see this happening. Unravelling those agreements is in no one's interests.

Compare the attitudes of US airlines to competition from EK and with public statements made by IAG CEO Willie Walsh. However unlikely it may be, these make it look more likely that talk of reimposing restrictions would come from the Western and not the Eastern Hemisphere airlines. Here in the UK the size and strong growth in flights and passenger numbers between the UK and DXB mean that it could challenge the LON-JFK market for passenger number leadership. Certainly the UK government has made no effort to discourage EK's dominance on these routes. Neither have the British airlines moaned about the ever increasing numbers of EK 380s that fly daily into airports across the UK.
 
a380787
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 1:28 pm

Quoting LAX772LR (Reply 9):

Quoting a380787 (Reply 7):
Well, UA might be happiest in that scenario though, since they're the ones lacking a LHR JV.

And the one with the least amount of hubs that would be affected.  

Yup. All of this is blind speculation that even if Brexit were true, the scenario of "Bermuda III" has less than 1% chance of happening. BA AA DL VS will be extremely vocal about its opposition.
 
bluenose5
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 1:49 pm

Bookmakers currently suggest that it's a 66% chance that Britain will stay, so all this is superfluous.

Whilst politics in this country is pretty daft, I don't see this one being lost. People value the cash in their bank, and as in the Scottish Independence referendum, the majority will not vote for the unknown.
 
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Polot
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 2:00 pm

Quoting a380787 (Reply 17):
Yup. All of this is blind speculation that even if Brexit were true, the scenario of "Bermuda III" has less than 1% chance of happening. BA AA DL VS will be extremely vocal about its opposition.

As would the US government. The British government can't just say only 2 US carriers and leave it at that, the US has to agree to it. If the UK was to unilaterally impose it BA and VS would likely encounter some difficulties in getting permission to operate many of their LHR-US flights. Given how long the US were trying to get rid of the Bermuda II agreement as the UK dragged their heels there is no chance of LHR being restricted again.
 
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 3:20 pm

Quoting Polot (Reply 19):

As would the US government. The British government can't just say only 2 US carriers and leave it at that, the US has to agree to it. If the UK was to unilaterally impose it BA and VS would likely encounter some difficulties in getting permission to operate many of their LHR-US flights. Given how long the US were trying to get rid of the Bermuda II agreement as the UK dragged their heels there is no chance of LHR being restricted again.

Bravo Polot,

The Bermuda 2 was a product of the last British Labor Government before Thatcher's Conservative party win in 1979. It was also one of the "greatest' accomplishments of the Carter Presidency, remember he is from Georgia. Those southern good 'ole boys( back then they were that) at Delta wanted to fly from Atlanta to London, but they could not; Delta had an interchange with Pan AM via Dulles to Europe from ATL at the time. So Jimmy agreed to the Bermuda 2 and the "Gatwickization" of all new USA to UK flights for the next 30 years.

Some long horn cattle in Texas lost their "horns" over that one. Harding Lawrence at Braniff wanted to launch DFW to London flights but was livid over having to fly to Gatwick instead of Heathrow. He even flew to London to charm the Brits by they don't particularly like Texans. Braniff would be " Gatwicked", try explaining that one in Dallas, its was as if their beloved Neiman Marcus was turned into Macy or worse Walmart.

There is no way we can or woud go back to those Draconian provisions. What wod Delta do with all their LHR slots and 49% in Virgin ?
 
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PW100
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 3:56 pm

Quoting Polot (Reply 19):
The British government can't just say only 2 US carriers and leave it at that, the US has to agree to it

I don't think it was suggested by anyone to go back to Bermuda II ??
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Polot
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 4:06 pm

Quoting PW100 (Reply 21):
I don't think it was suggested by anyone to go back to Bermuda II ??

Straight from the OP:

Quoting vs11 (Thread starter):
Will access to LHR be limited to only 2 US carriers? Will AA and UA be grandfathered? Interesting times...

The whole premise of this thread is whether LHR would be revert to a "Bermuda II"-esque situation.
 
VS11
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 5:27 pm

Quoting jfk777 (Reply 20):
There is no way we can or woud go back to those Draconian provisions

Draconian or not, if Britain is out of the EU, what is the benefit for it of the Open Skies as is now? Why would Norwegian be allowed to fly LGW-BOS? That amounts to fifth freedom rights.
 
a380787
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 5:35 pm

Quoting vs11 (Reply 23):

Draconian or not, if Britain is out of the EU, what is the benefit for it of the Open Skies as is now? Why would Norwegian be allowed to fly LGW-BOS? That amounts to fifth freedom rights.

I'm guessing UK would be grandfathered into EFTA, which is what Norwegian uses even though Norway isn't EU either ? Of course EU can also punish their exit by kicking them out of both EEA and EFTA and isolating them on multiple fronts.
 
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scbriml
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 5:37 pm

Even if the UK does vote to leave the EU, nothing will change on 24th June. There have been various estimates that it will take at least two years to negotiate the withdrawal. That's plenty of time to resolve issues like Open Skies between UK and US.

Nobody, but nobody wants to go back to the daft days of Bermuda II.
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FlyCaledonian
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 8:07 pm

Quoting VV701 (Reply 16):
Some have suggested that the UK will be keen to reimpose Bermuda 2 type restrictions in the event of Brexit. In practical terms with the antitrust immunity agreements I cannot see this happening. Unravelling those agreements is in no one's interests.

Sounds like a "Project Fear" type claim! (As in who the "some" are)

Quoting scbriml (Reply 25):
Even if the UK does vote to leave the EU, nothing will change on 24th June. There have been various estimates that it will take at least two years to negotiate the withdrawal. That's plenty of time to resolve issues like Open Skies between UK and US.

Exactly, under the Lisbon Treaty the 2 year limit would begin once the UK gives formal notice of its intention to quit. It could wait 12-24 months to do that, do a lot of groundwork and then quit.

What made me laugh was the Former Cabinet Secretary, Gus O'Donnell, saying in a recent interview that one reason not to quit would be because over the last 40 years the EU has negotiated how so many treaties we no longer have the skills! Well maybe we'd have to headhunt a few people from the private sector to do the job.

I think people in the UK forget we're the fifth biggest economy in the World, with a global financial centre and and big trade links. Whilst not good that we import more than we export, if there was a Brexit that's a lot of countries who might not want to lose out on a nice export market by having lots of tariffs imposed. And that includes European countries.
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rutankrd
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 8:30 pm

Quoting scbriml (Reply 25):

Even if the UK does vote to leave the EU, nothing will change on 24th June. There have been various estimates that it will take at least two years to negotiate the withdrawal. That's plenty of time to resolve issues like Open Skies between UK and US.

The convention allows 2 years to negotiate the framework for separation - That document then needs ratifying by the remaining 27 member states.

From the ratification framework document the real negotiations begin !

Brexit will be a very lo-------ng process if it comes to it and just because of a desire to introduce some VISA restrictions on Bulgaria/Romania and the Baltic states by a few bigots !

The debate has been hijacked by the so called immigration crisis - Leavers and some of our media are deliberately obfuscating the Middle East Refugee mass movement - Nothing to do with Eu membership, illegal economic migration particularly from the Sub-Continent all of whom found can be deported and Eu free movement enshrined in the Eu treaty.

The last is essential as part of the single market - Labour being a commodity and in any market that Labour moves to fill demand- Particularly in the UK in the South East and to some extent the agricultural sectors (Eastern Europeans and even Portuguese guest workers have been drawn to this for decades as the indigenous population here is largely generations removed from the land )
 
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PW100
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 9:31 pm

Quoting Polot (Reply 22):
Straight from the OP:

Oeps. Sorry.
Missed that (and my coffee apparently). My head was somehow working on the thought of status quo from current situation. Never mind.
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VS11
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RE: Bermuda III If Brexit Happens

Wed Apr 06, 2016 10:28 pm

Quoting a380787 (Reply 24):
Of course EU can also punish their exit by kicking them out of both EEA and EFTA and isolating them on multiple fronts.

I don't think the EU will want to punish Britain for a potential exit. The rest of the EU will probably be relieved. Many events after the financial crisis have demonstrated the need for more EU integration and Britain seems to be going in the opposite direction, which is of course their right. But obviously there are plenty of areas where Britain and the EU can continue to work as they are now.
 
vv701
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 12:46 am

Quoting FlyCaledonian (Reply 26):
Whilst not good that we import more than we export, if there was a Brexit that's a lot of countries who might not want to lose out on a nice export market by having lots of tariffs imposed. And that includes European countries.

Typically an EU member state depends on the UK for the income of around 5 per cent of its total export income. On the other hand the UK depends on the EU member states for around 50 per cent of its export income. So the UK's EU exports are a whole order more important than, on average, are the other EU members' exports to the UK. A five per cent decline in trade between the UK and the EU would reduce the other EU member states' export income by around 0.5 per cent and the UK's export income by 5 per cent.

Additionally the EU budget will loose the UK's net annual contribution of £8.5 billion. So to break even the EU will need to reduce their spend by £8.5 billion or find the money elsewhere. If the EU reduces their budget they will need to reduce their expenditure in the remaining EU countries. Otherwise to break even will require the other members to find that money from some other source. They could find it from increases in local taxation. It could also come from EU import tariffs. If the later which exporting country is most likely to see new tariffs applied to its exports to the EU? Or will the remaining members smile happily and give the UK a great deal while it walks away with what today is their £8.5 billion?
 
VS11
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 1:29 am

Quoting VV701 (Reply 30):
Or will the remaining members smile happily and give the UK a great deal while it walks away with what today is their £8.5 billion?

But is the annual contribution the major issue for the Brexit? Based on what I have read, it is also about migrant workers, abuses of social perks by foreigners, European regulation especially in the financial services.
 
richcandy
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 6:31 am

If it does happen and personally I think its unlikely, I wonder what will happen between Northern Ireland and the Republic of Ireland. I guess the common travel area would have to go, otherwise EU citizen arriving in the Republic would be able to cross unchecked into the UK.

If it does happen and the UK leave will flights be effected that much. I mean in parts of the EU an inter EU flight is considered domestic where as a flight from say Germany to the UK is still international.
 
bennett123
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 6:58 am

The bit about regulation in financial services made me smile.

Clearly the City wants less regulation.

But is this a good idea for the rest of the economy.
 
jfk777
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 11:19 am

Quoting vs11 (Reply 23):
Draconian or not, if Britain is out of the EU, what is the benefit for it of the Open Skies as is now? Why would Norwegian be allowed to fly LGW-BOS? That amounts to fifth freedom rights.

As part of the Open Skies treaty European airlines can fly from each other hubs, AF tries LAX to LHR with a 777 a few years ago.

Norwegian is filling in a niche which no British airline wants to fill at Gatwick. They are filing a market neither BA or Virgin want. 10 787 flights daily ti the USA is hardly a drop in the Ocean of what BA flies to the USA. Norwegian could soon be flying to GRU and Asia from LGW so the future looks interesting for them.
 
vv701
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 5:46 pm

Quoting vs11 (Reply 31):
But is the annual contribution the major issue for the Brexit?

Yes. Every day those advocating Brexit mention the daily figure pertaining to the net UK contribution. It is higher profile than any other issue because it represents a daily tax of around £5 for each UK resident. And when it comes to the crunch a significant part of the population vote with their pocket.
 
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readytotaxi
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 5:52 pm

Quoting mercure1 (Reply 10):
Nothing will happen.

David Cameron has already said the UK would honor all its treaty obligations with 3rd parties.
The vote is to disassociate with the EU, not scrap every agreement the UK is part of.

Anyhow even if vote to exit were to pass, it would be an extremely complex long term process and minor detail like aviation treaty is not going to be very high on list of things to worry about for the government.

I found that to be a very intelligent post on the subject.
  
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vv701
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 9:05 pm

Quoting VV701 (Reply 35):
Every day those advocating Brexit mention the daily figure pertaining to the net UK contribution.

I forgot to say that the number they use in these interviews is the gross UK payment to the EU.

It is reduced by a variable rebate negotiated by Maggie Thatched back in 1984. The so-called British Rebate is literally sent back to the UK government after the full UK gross contribution has been paid by the UK to the EU. It is currently worth about €6 billion (about £5 billion) a year.

The gross amount quoted by Brexit also excludes payments made to the UK under the Common Agriculture Policy (CAP) and regional support and other grants that are funded by the EU. These currently result in payments into the UK by the EU of around some £4.5 billion a year of which two thirds is paid to UK farmers under the CAP.

The fact that Brexit quotes the gross and not the net UK contribution to the EU budget is, in my view, indicative of the importance that they think the UK voters place on the cost of EU membership.
 
glbltrvlr
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 9:19 pm

Quoting VV701 (Reply 37):
The fact that Brexit quotes the gross and not the net UK contribution to the EU budget is, in my view, indicative of the importance that they think the UK voters place on the cost of EU membership.

The UK gross contribution to the EU in 2015 was £13B, but that is after the £5B "rebate" which isn't really a rebate as it never gets remitted to the EU. EU "spending" in the UK was £4.5B, which includes CAP payments, leaving a net outflow of £8.5B. Combine that with the loss of immigration control, regulation over which the UK has very little influence and the EU eyeing the City as a source of future revenue, and it's not difficult to see why a lot of people are questioning if membership is worth it.

[Edited 2016-04-07 14:20:13]
 
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FlyCaledonian
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RE: Bermuda III If Brexit Happens

Thu Apr 07, 2016 9:49 pm

Quoting VV701 (Reply 37):
The gross amount quoted by Brexit also excludes payments made to the UK under the Common Agriculture Policy (CAP)

Ah yes, the Common Agricultural Policy. Hell will freeze over before that sees major reform because our cousins across the channel are rather attached to the policy.

Quoting VV701 (Reply 30):
Typically an EU member state depends on the UK for the income of around 5 per cent of its total export income. On the other hand the UK depends on the EU member states for around 50 per cent of its export income. So the UK's EU exports are a whole order more important than, on average, are the other EU members' exports to the UK. A five per cent decline in trade between the UK and the EU would reduce the other EU member states' export income by around 0.5 per cent and the UK's export income by 5 per cent.

I really must be reading the graph (figure 2) in the attached, which I thought was showing that the EU exports more to the UK than it imports. Given that if a Brexit happened it would be the UK negotiating with the EU as a whole (Not each member individually) would the EU really want to start a trade war if the UK could just as easily slap import tariffs on goods from the EU?

Let's Go British Caledonian!
 
vv701
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 2:25 am

Quoting FlyCaledonian (Reply 39):
I really must be reading the graph (figure 2) in the attached, which I thought was showing that the EU exports more to the UK than it imports.


In 2014 the 27 other member countries of the EU bought 44.6 per cent of all of the UKs exports of goods and services. Of all of the UK's imports of goods and services 53.2 per cent were bought from the 27 other EU countries.

So the UK is dependent on the other 27 EU nations for nearly half of its exports. However the average percentage of UK imports from each of the other individual EU countries is just 2.0 per cent simply because there are 27 of them exporting 53.2 per cent of the UK's imports. This contrasts with the UK exporting to the 27 other EU countries.

The UK's total exports to the EU were £227 billion equivalent to $317 billion at today's exchange rate. According to the OEC the UK's largest trading partner in the EU, Germany, exported $88.8 billion worth of goods and services to the UK in 2013. So in the unlikely event of the imposition of tariffs on UK-EU trade in the event of Brexit those tariffs would hit the UK around four times harder than they would hit the UK's largest trading partner in the remaining 27 EU countries.
 
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lightsaber
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 3:53 am

Quoting vs11 (Reply 15):
Seems to me reverting to the pre-existing agreement would be the easiest action to do.

There would be no desire by the USA to revert.

The USA would not only impose the same conditions upon British airlines, but they would then limit US destinations to VS and BA to the number of destinations in Britain served by US airlines. Apply 'game theory' which is 'what is in the best interest of each side.' The US would argue Open Skies or new rules.

The historical example is Smoot-Hawley. For trying to impose trade rules quickly turns into trade war.

Quoting Polot (Reply 19):
Given how long the US were trying to get rid of the Bermuda II agreement as the UK dragged their heels there is no chance of LHR being restricted again.

Exactly. If the UK tried to impose in this political climate, it would get ugly fast.

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rutankrd
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 9:38 am

The US3 should be grateful to the EU and so should very many the the UK because without them i doubt UK PLC would have moved significantly on the Bermuda 2 treaty- It protected BA quite nicely.

Anyway where are we with phase 2 - The UK position on cabotage remains un-resolved doesn't it !
 
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par13del
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 10:13 am

Quoting vs11 (Reply 15):
Seems to me reverting to the pre-existing agreement would be the easiest action to do.
Quoting VV701 (Reply 16):
Some have suggested that the UK will be keen to reimpose Bermuda 2 type restrictions in the event of Brexit.
Quoting scbriml (Reply 25):
Nobody, but nobody wants to go back to the daft days of Bermuda II.

Except BA, being able to operate to multiple airports in the USA while limiting access to LHR via slots to only one or two US carriers would be a boom economically.

As for the US agreeing to go back to BII, it depends on what the US government wants in return and which US airline wields the most political clout during the negotiations.
Thinks that outside the realm of possibility, just look at the original BII and wonder how that got put into effect.
 
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 12:42 pm

Quoting par13del (Reply 43):
Except BA, being able to operate to multiple airports in the USA while limiting access to LHR via slots to only one or two US carriers would be a boom economically.

This is a most unlikely scenario,

First it is UK government policy to maximise commercial aviation policy. This is illustrated by the MoU signed between the UK and the UAE in 2012. Here is a brief extract from this UAE summary document:

http://www.uaeinteract.com/docs/UAE_...rvices_Agreement_with_UK/48318.htm

'The existing bilateral framework allows full flexibility on the routes, capacity, number of frequencies, types of aircraft and allows for specific fifth freedom rights.'

This agreement is just as open as the EU/USA Open Skies agreement.

Second have we heard any BA or IAG complaints bout this agreement or the ever growing number of EK 380 flights between DXB and a significant number of UK airports? I haven't. But I have heard LH complaining although Germany is a larger country both from a geographic and population perspective. I have also heard similar concerns about EK expressed by the US3.

Things certainly change. Neither BA nor the British government is the same today as they were 20 or 25 years ago. If public statements are any guide at all the UK is less likely to even discuss abrogating an Open Skies Agreement than most if not all other countries. Indeed it has been pre-empting likely EU negotiations with third party countries by negotiating Open Skies Agreements with countries that the EU has not yet negotiated an agreement.

These countries include, for example, Singapore. That agreement, is not so restrictive as the US/EU Open Skies agreement. It grants 6th, 7th 8th and 9th freedom rights to the airlines of both countries as well as 1st, 2nd, 3rd, 4th, 5th freedom rights. More recently (2012) a UK / Malaysia bilateral Open Skies agreement was signed:

http://www.routesonline.com/news/29/...es-but-will-it-bring-new-services/

Does BA or IAG complain. Well if they lobby the UK government they certainly do not make any anti-competitive views public as have both LH and the US3. This despite the fact that the UK, currently sees most EK 380s at more of its airports than does Germany or the USA.

Finally the thought that the British government that is signing Open Skies bilateral agreements with other countries (as illustrated above) would in any way wish to restrict airline operations between the UK and the largest country for its exports, the USA, seems pretty far fetched to me.
 
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 12:52 pm

Quoting par13del (Reply 43):
As for the US agreeing to go back to BII, it depends on what the US government wants in return and which US airline wields the most political clout during the negotiations.

None of the US airlines would want to go back to BII. AA and DL would instantly lose their JV with BA and VS respectively, and one of the three would lose LHR access altogether. UA would be the most amendable if they had LHR access since they have no JV partners at LHR.

Quoting par13del (Reply 43):
Thinks that outside the realm of possibility, just look at the original BII and wonder how that got put into effect.

At the time there were only 2 principle US transatlantic carriers, PA and TWA (yes I am aware other airlines flew intercontinental, but they were small potatoes), and the US aviation market was still regulated, so the US was more agreeable to the restriction. They then spent decades trying to get rid of it.
 
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PW100
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 5:46 pm

Quoting VV701 (Reply 35):
. . . it represents a daily tax of around £5 for each UK resident

--> £5 per day;
--> £5 * 365 = £1825 per year for each resident;
--> 65M UK residents;
--> 65M x £1825 = £118625M = £118.6 B gross per year.

Is UK paying europe around £120B each year, gross? Is that number correct, or am I missing something?
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glbltrvlr
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 5:56 pm

Quoting PW100 (Reply 46):
Is UK paying europe around £120B each year, gross? Is that number correct, or am I missing something?

See my post above:

Quoting glbltrvlr (Reply 38):
The UK gross contribution to the EU in 2015 was £13B, but that is after the £5B "rebate" which isn't really a rebate as it never gets remitted to the EU. EU "spending" in the UK was £4.5B, which includes CAP payments, leaving a net outflow of £8.5B
 
vv701
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RE: Bermuda III If Brexit Happens

Fri Apr 08, 2016 7:51 pm

Quoting PW100 (Reply 46):
--> £5 per day;

Thanks. Sorry should have been £5 a WEEK for a population of 62 million.

This is what many advocates of Brexit are regularly claiming. However their starting point is to look at the UK gross contribution to the EU budget. This was £17.8 billion in 2015. This is £287 per head of population. That is about £5.50 per week for every resident man, woman and child resident in the UK.

What Brexit says is either that the UK sends £55 million to the EU every day or that the UK sends £385 million to Brussels every week. But this is not correct. Their gross figure excludes what is known as 'the British rebate'. In 2015 this totalled £4,9 billion. This reduced the sum that was actually sent from London to Brussels to £12.9 billion. The Brexit figure also intentionally ignores the £4.4 billion returned by the EU directly to the UK public, primarily their farmers as part of their Common Agriculture Policy. It also ignores payments made by the EU to UK private organisations that totalled £1.1 billion in 2015. So by quoting the amount sent to the EU their figures carefully ignore these gross benefits to the UK economy totalling £5.5 billion.

For more detail and to check out the EU member states like Germany, the Netherlands, Sweden and the UK who send to Brussels more than twice what they receive back see:

http://www.telegraph.co.uk/news/news...-Britain-pay-to-the-EU-budget.html
 
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par13del
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RE: Bermuda III If Brexit Happens

Sat Apr 09, 2016 12:26 am

So based on our current environment, one side believes the UK pays its fair share of tax to the EU and the other does not.
I hope the vote is not about money, the power of the EU parliament and how they got it should be a factor. Initial votes by the people on most things EU have all failed, the answer to the public notification has been to revert the vote to the parliaments, we all hope that one day the concerns will be addressed, if the UK votes to leave the odds increase a wee bit that some steps will be taken, though I doubt it.

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