UK could become 'no fly zone' if Brexit deal cannot be struck, Hammond warns
European flights into and out of Britain could be grounded should no Brexit deal be struck, Chancellor Philip Hammond has warned.
Giving evidence before the treasury select committee, Hammond confirmed industry fears that failure to secure a deal could have catastrophic consequences for the airline industry.
“It is theoretically conceivable that in a no deal scenario there would be no air traffic moving between the UK and the European Union,” he said.
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“But I don’t think anybody seriously believes that that is where we would get to.
“There is a range of outcomes and what we would need to do at a point in time is to determine what is a realistic worst-case scenario and plan for and invest for.”
Hammond is the first major government figure to speculate on what may happen on Brexit day – March 29 2019.
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Airline industry heavyweights such as Ryanair’s Michael O’Leary have raised repeatedly the spectre of UK-based carriers being grounded if no arrangements can be made over the next two years.
Europe operates an Open Skies agreement that allows EU airlines, including those registered in the UK, to operate in each other’s countries without financial penalties.
Unlike other sectors, aviation cannot fall back on World Trade Organisation rules.