Brexit: Planes to be grounded if UK crashes out of EU without one-off air deal, Theresa May told

Planes will be grounded if Britain crashes out of the EU unless a specific aviation deal can be struck with Brussels, Theresa May is warned today.

Falling back on World Trade Organisation (WTO) rules would not grant the UK air traffic control rights if it leaves the EU without an overall agreement, a report by a thinktank concludes.

Leaving the EU’s Single Aviation Market (Sam) in March without a replacement arrangement would strip most UK-based airlines of their operating licences for the 27 countries, said the Institute for Economic Affairs.

Sam currently covers the UK’s rights to the so-called “freedoms of the air”, which include overflights of countries without landing and operating internal flights in foreign countries.

The UK would also lose air traffic rights involving countries including the United States, Canada and Switzerland because they had been made through the EU.

“If there are no alternative arrangements in place, it would be as bad as the worst fears suggest: planes would not be allowed to fly,” said Julian Jessop, the IEA’s chief economist.

However, the report said the government would have options, even in a no-deal Brexit, including:

* Joining other non-EU countries Norway and Iceland as members of the European Common Aviation Area (ECAA) – although this would mean following EU rules and “fudging” the government’s Brexit “red lines”.

* Negotiating a bespoke free trade agreement for aviation, although this could mean “reduced access to the EU market” and “would also take longer to agree”.

Nevertheless, the IEA said there were “reasons for optimism” which meant the risk of flights being grounded was “conceivable, but still very unlikely”.

The UK was a world leader in aviation, which meant it had “plenty of leverage” as the largest market in Europe and the third largest in the world.

The report pointed to strong mutual interests, saying: “Grounding UK airlines would be hugely damaging for the EU economy, particularly in areas like tourism.

“And, of course, foreign airlines presumably want to continue to fly to and from the UK as well.

“Since these agreements are reciprocal, it is unlikely that other countries would deny the UK the most important rights when they would then almost certainly lose them too.”

Philip Hammond, the Chancellor, first admitted it was “theoretically possible” that a failure to reach a Brexit agreement would halt air traffic between Britain and the EU, speaking in October last year.

At the time, he insisted he did not think “anybody seriously believes that is where we will get to”, arguing an air travel deal would be struck regardless.

Mr Jessop said there were also “several quick fixes” available, including a temporary extension to current arrangements through a simple memorandum of understanding.

“The key question for the EU is whether the necessity of keeping planes flying outweighs any threats to the integrity of the single market or the risks of giving the UK special treatment – the answer must surely be ‘yes’,” he argued.