Consultant Insight: US-UK agreement clears runway for post-Brexit flights

The Air Services Agreement created in November 2018 allows for flights between the U.S. and U.K post-Brexit, beginning Jan. 1, 2021. The agreement was officially signed this week by U.K. Transport Minister Grant Shapps, U.S. Secretary of State Mike Pompeo and U.S. Transportation Secretary Elaine Chao. [caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] The agreement allows the two countries to continue existing operations as they did under the EU-U.S. Open Skies deal and will replace the current EU agreement. “The Air Services Agreement will allow us to continue to travel and trade with one of our closest friends and allies, working together to mutually boost our economies either side of the Atlantic,” said Shapps of the agreement. U.S.-based airlines operating to the U.K. expect the agreement to benefit both countries economically. “We warmly welcome the signing,” a United Cargo spokesperson told Air Cargo World . “The agreement will enable United and the airline industry as a whole to continue providing important economic benefits for both countries. The agreement allows for the same air services rights that carriers have today to continue when the U.K. exits the European Union on Dec. 31.” Delta Cargo, which in 2019 transported 18,800 tonnes of pharma, perishables and general cargo from London Heathrow Airport (LHR) to the U.S., told Air Cargo World , “Delta applauds the U.S. and U.K. governments for signing the bilateral Air Services Agreement, which ensures that travel between the U.S. and U.K. can continue without disruption after the Brexit transition period ends.” From a freight perspective, the agreement allows for U.S. airlines transporting freight between the U.K. and third countries not be required to land on U.S. soil first. Air value and volume have been healthy between the two countries. According to the U.S. Census Bureau, U.S. air exports for 2019 increased 14.0% in terms of value, although 2019 volumes slipped 9.4%. U.S. air imports for 2019 increased 7.0% in terms of value while 2019 volumes increased 3.9%. This year, however, trade between the two countries has been severely impacted by the COVID-19 pandemic. Year-to-date through September, export air cargo by value is down 16.2% and import air cargo by value is down 15.1%. Exports are down 25% by air cargo volume, and import volumes are down 18.3%. From March through October, LHR reported 153 flights to and from the U.S. of fish, mail and general cargo with a total weight of 5.2 million pounds, or about 2,300 tonnes. In 2019, 123 million pounds, or 55,800 tonnes, of U.S. cargo moved through LHR while 163 million pounds, or 73,900 tonnes, moved from LHR to U.S. destinations. In addition to the U.S., the U.K. has also already made bilateral agreements with Canada, Israel, Norway and Switzerland. Moreover, the U.K. has traffic rights under bilateral agreements with more than 100 other countries to which the EU is not party, including Brazil, China and India. However, the U.K. and the EU are still under pressure to replace the existing Comprehensive Air Transport Agreement (CATA) that expires Dec. 31. CATA currently allows U.K. airlines to access 27 EU states and 17 other countries. Should an agreement not be reached, it is likely that the EU and U.K. will implement contingency measures. According to Fitch Ratings, a failure to reach a new agreement or implement contingency measures between the EU and the U.K. could result in the grounding of U.K.-EU flights — an outcome best avoided to keep cargo flowing through the region.

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Consultant Insight: US-UK agreement clears runway for post-Brexit flights

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