International Airlines Group (IAG), the Madrid-based owner of British Airways, has rejected speculation that the airline would have to split from its European parent company after the Brexit transition period at the end of the year.
During a virtual Eurocontrol conference on Monday, the often outspoken chief executive of low-cost rival Ryanair suggested there was no way that IAG could comply with European law by keeping British Airways within its portfolio of airline brands after Brexit.
As well as British Airways, the airline group also owns Iberia, Vueling and Iberia. The group is also in negotiations to take over Spanish airline Air Europa. IAG trades on both the Madrid and London stock exchanges but is headquartered in Spain.
“I cannot see how IAG can survive as an owner of BA in a post-Brexit environment,” Michael O’Leary told the conference. “I think it is likely there will be some breakup of the IAG group, or BA will have to step outside the IAG group,” he continued.
But an IAG spokesperson denied British Airways would need to be spun off as a separate company, even if the UK crashes out of Europe without a deal as is looking increasingly likely.
“We are confident that we will comply with the EU and the UK ownership and control rules post-Brexit transition period,” a spokesperson for IAG fired back on Monday following O’Leary’s speculative comments.
Under EU rules, European airlines must be at least 50 per cent owned by European national or face losing their air operator licences. In October, around 39 per cent of IAG shares were owned by foreign nationals but following Brexit, any shares held by British national will not count as towards the EU ownership requirement and could tip the scale over the 50 per cent mark.
Both France and Germany, home respectively to the Air France and Lufthansa airline group’s, said to be pushing for a strict interpretation of EU rules following the UK’s final departure from the bloc.
IAG has not revealed how many shares British nationals hold in the company.
Despite initial fears that Brexit would lead to travel chaos, both IAG and Ryanair are at least in agreement that planes will still be able to fly freely between the UK and EU countries without disruption following Brexit.
Following the UK’s departure from the EU in January, the Brexit transition period will end on 31 December 2020.
