April 22, 2021

The European Commission will give a seven-month extension to Iberia to restructure its shareholding

The European Commission will give a seven-month extension to Iberia to restructure its shareholding


Updated:

The European Commission will give groups such as IAG, owner of British Airways and Iberia, a period of seven months to restructure its shareholding in order to maintain their flight rights in the European Union (EU) in case the United Kingdom leaves the block without agreement on March 29.

According to the information provided last Friday by the Financial Times, this period of adjustment, in which airlines must show that they are ownership and majority control of EU citizens, it is foreseen in the revisions to a draft on this matter.

"The plan must establish, completely and precisely, the measures aimed at achieving full compliance with the requirements (of the EU) on ownership and control, with October 27, 2019 as the latest date", establishes said project .

"In the event that the airline has not submitted a plan within the deadline (two weeks) the competition authority on licenses may revoke the operating license», He adds.

The member states of the EU are broadly supporting this position in a strictly regulated sector that will suffer a double hit with the Brexit, because an exit without agreement will alter the schedules and licenses with which they used to operate.

Sources of the block quoted by the newspaper have indicated that this grace period will be added to a series of requirements and deadlines that will force groups like IAG and Ryanair to sell shares controlled by citizens of non-EU countries.

The Ministry of Development, José Luis Ábalos, revealed on Thursday that Iberia has sent the Government "a proposal of Spanishness" before a scenario of application of Brexit, after appearing in Congress, where he addressed how this process will affect transport.

During his speech, Ábalos said he had proof of this without referring specifically to any company that certain airlines were «Working intensively» in adjustments in its structure of ownership and control in order to anticipate the Brexit and to be able to maintain its community license, which guarantees the flight rights.

The owner of Development explained that these changes would be "necessary" to ensure continued compliance with the regulations and maintain operating licenses in force.

European regulations require that an airline maintain its operating license as an air operator (AOC) that more than 50% of its ownership or effective control structure rests with EU member states or its national companies, something that today IAG does not comply.

Iberia is a Spanish airline, with an operating license issued in accordance with European regulations. The society that controls most of the political rights after its merger with British Airways is Garanair, controlled by El Corte Inglés.

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