In order not to lose its operating license in the European Union, the Irish company Ryanair announced Tuesday, December 29 that it was depriving its British shareholders of voting rights at its next general meetings.
European air transport legislation provides that, in order to obtain a license to operate flights between two EU destinations, a company must be more than 50% owned. “And effectively controlled” by nationals of Member States “Directly or indirectly”, which will no longer be the British from 1er January.
Hence Ryanair’s decision to prevent its non-European shareholders “To attend, speak or vote at a general meeting of the group” the time that the board of directors verifies that “The capital structure and group control no longer represent a risk for licenses”.
Ryanair but also Wizz Air or Easyjet
Last July, the Irish company said it was just over the limit, with 53.1% of its capital held by European Union nationals. But with 20% of the shares in British hands, the board of directors had decided in March to limit their voting rights in the event of “Hard Brexit”.
→ ANALYSIS. Air transport at the risk of a no-deal Brexit
Neil Sorahan, Ryanair’s chief financial officer, then explained that he expected a large part of these Britons to decide to resettle in the European Union, allowing Europeans to pass the 50% stake again.
In the European sky, Ryanair is not the only one to be affected by Brexit. Thus, the low-cost company WizzAir, Hungarian but also listed in London, would be 80% owned by non-Europeans. It therefore also announced the withdrawal of their voting rights.
The Spanish government fought for Iberia
For its part, the British EasyJet has placed its intra-European flights in a subsidiary based in Vienna (Austria) and 45% owned by Europeans, a figure it wishes to increase rapidly.
Finally, worried about Iberia and its low-cost subsidiary Vueling, both owned by the British IAG (British Airways), Spain fought to protect its national company. In the twenty pages devoted to air transport by the Brexit agreement, the government of Pedro Sánchez obtained the creation of a “Special committee on air transport” who has one year to change the rules of ownership and control of air carriers.
In the meantime, IAG has placed all of its voting rights in Iberia in the hands of the Spanish store chain El Corte Inglés, traditionally close to Iberia, which would allow the Iberian carrier to keep its operating license. in the EU until the rules are relaxed.
France and Germany oppose any liberalization
According to Reuters, France and Germany would nevertheless oppose any liberalization. For Paris and Berlin, it would be a question of avoiding a relaxation of the rules allowing in particular the Gulf companies to take control of European carriers.
→ READ. In air transport, the crisis could last until 2024
In the event of an agreement with Great Britain on the subject, the French and Germans fear that extra-European companies will use British companies as “Trojans” in the European sky, at the risk of weakening their own companies already very affected by the Covid crisis.
According to the Spanish economic media Vozpopuli, the large European groups like Air France, Lufthansa or even Ryanair would fight in Brussels against IAG in order to force the British group – 25% owned by Qatar Airways – to separate. from Iberia and Vueling.