UK-based airlines told to move to Europe after Brexit

London, March 22 (IANS) EU chiefs have warned airlines, including easyJet and Ryanair, that they will need to relocate their headquarters or sell off shares to European nationals if they want to continue flying routes within continental Europe after Brexit, a media report said.

Executives at major carriers have been reminded that to continue to operate on routes across the continent, for instance, from Milan to Paris -- they must have a significant base on EU territory and that a majority of their capital shares must be EU-owned, the Guardian reported on Wednesday.

The development potentially makes it more likely that the carriers will act to restructure, with economic consequences for Britain, including a loss of jobs.

The tough line from the EU may encourage Britain to reciprocate with its own nationality rules, which would leave EU-owned airlines facing equally difficult choices, potentially dampening their investment in Britain in the short term, although some may seek in time to establish their own British subsidiaries, according to the report.

The ability of companies such as easyJet to operate on routes across the EU has been a major part of their business models, and there may be a renewed willingness among airlines to invest outside Britain to maintain market share.

British Airways does not fly intra-Europe, but its parent company International Airlines Group (IAG) is likely to need to disinvest shareholders in order to be majority EU-owned, and allow its other EU-registered carriers to continue to operate across Europe.

An IAG spokesman said: "We will continue to comply with the relevant ownership and control regulations."

Some airlines have already started to seek alternative headquarters, and to examine how they might ensure that their shareholding is majority-EU owned, possibly through the forced disinvesting of British shareholders.

Thomas van der Wijngaart, an aviation expert, told the Guardian there could be significant economic consequences for Britain with airlines changing their financial and operating structures, and building a stronger presence on the continent.

"It might be that carriers choose to have domestic flights [on the continent] operated by their new European operating licence, which would probably mean a reduction in staff in the UK," he warned.

(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)