Brexit, Flybe and unlawful state aid
It is perhaps one of life's little ironies that just when one had thought that Brexit was almost "done", at least one aspect of EU law has become the focus of national attention in the UK.
The UK press has reported this week on a UK Government backed deal to save the regional UK airline, Flybe. The full terms of the deal have not been published by the UK Government but they are reported to include temporary deferral of over £100 million of UK Air Passenger Duty to help Flybe get over the low revenue earning winter period and a Government loan to help with re-structuring.
A number of Flybe's competitors are up in arms and International Airlines Group (IAG),the parent company of BA, is reported to have written to the EU's competition directorate to complain that the deal appears to contravene EU state aid rules. The UK Government and Flybe deny this allegation and proclaim that the deal is both commercial in its terms and socially necessary in its context in that by supporting Flybe, which flies between less well-known regional airports in the UK, the UK is helping preserve "regional connectivity" between less advantaged parts of the UK.
Many critics argue that more investment should go into railways and other forms of transport which are less damaging to the climate than air travel but rival airlines appear to be focussing on the EU-based "unlawful state aid" argument ( even though a number of Flybe's main flying routes appear to be based solely in the UK).
What will happen to this "unlawful state aid" argument when Brexit takes place? There are a number of possible consequences depending upon the kind of Brexit that occurs but paragraph 77 of the draft non-binding Political Declaration, negotiated between the EU and the UK in October 2019, is relevant in that it emphasises the need to ensure a level playing field for "open and fair competition" between the UK and the EU post-Brexit and to that end to ensure that the UK and EU should uphold "common high standards" in matters such as "state aid".
In an inter-connected Europe, arguments about alleged unlawful state aid are likely to run and run (and maybe even, to fly!)
