EU chiefs have warned airlines including easyJet, Ryanair and British Airways that they will need to relocate their headquarters and sell off shares to European nationals if they want to continue flying routes within continental Europe after Brexit.
Executives at major carriers have been reminded during recent private meetings with officials 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 development, coming days before the triggering of article 50, potentially makes it more likely that the carriers will act to restructure, with economic consequences for the UK, including a loss of jobs.
The tough line from the EU may encourage the UK to reciprocate with its own nationality rules, which would leave EU-owned airlines facing equally difficult choices, potentially dampening their investment in the UK in the short term, although some may seek in time to establish their own British subsidiaries.
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 the UK to maintain market share.