London Stansted Owner Sees Quick Fix for Brexit Aviation Threat

(Bloomberg) -- London Stansted and Manchester airports owner MAG said it sees a relatively easy fix for the potential grounding of flights between the U.K. and European Union in the event of a so-called hard Brexit.

The existing open-skies regime that permits unfettered flying by EU airlines within the bloc could easily be maintained by adopting a structure “mimicking” the status quo, Manchester Airports Group Chief Executive Officer Charlie Cornish said in an interview Wednesday.

“A soft Brexit agreement is certainly preferable and the government needs to move its thinking forward in terms of aviation and open skies,” Cornish said Wednesday. “But they are aware of it and it’s not that complicated.”

Ryanair Holdings Plc, which has its biggest base at Stansted, has raised the specter of a no-deal Brexit grounding flights and isolating the U.K. when it quits the EU next year, with CEO Michael O’Leary saying holidaying Britons may be limited to ferry, rail and road trips as the industry is plunged into crisis.

Cornish said the U.K. “is such a major aviation market” -- ranking third in the world after the U.S. and China with 250 million passengers a year -- that he “can’t see” there being an issue. London Heathrow airport serves as Europe’s biggest global entry-point and Mediterranean economies from Portugal to Greece rely heavily on vacationing Britons.

‘Strong Enough’

The CEO said he also has “no concerns” about maintaining trans-Atlantic flights, though current access agreements were negotiated by the EU. Manchester airport ranks sixth in Europe for passengers traveling direct to the U.S. Virgin Atlantic Airways Ltd., which serves American cities from the airport, said in March it’s “not even remotely worried” about U.S.-U.K. negotiations.

“We’ve always been clear that our preference is to remain in the EU, but that said we think our group and our airports are in strong enough position to withstand the impact of Brexit,” Cornish said.

MAG anticipates a surge in demand for extra flights from airlines before Heathrow’s third runway, backed by U.K. lawmakers last month, opens for business after 2026.

Passenger numbers at Stansted, Europe’s biggest discount hub, could swell from 26 million to 43 million in a decade as it attracts more full-service and long-haul airlines, Cornish said. Demand on a new route to Dubai operated by Emirates, the world’s largest long-haul airline, is running ahead of expectations in terms of seat occupancy rates and forward bookings, he said.

The customer count at Manchester is likely to jump from 28 million to 40 million over the same period as the hub, which already has a significant line up of global carriers, seeks to become a “northern version of Heathrow,” he said.

Cornish said improving rail links to the airports, with a better service from London Liverpool St. to Stansted and high-speed trains to Manchester from Liverpool, Leeds and Sheffield should be a priority for the government as its seeks to accommodate out more passengers in the next few years.

©2018 Bloomberg L.P.