IAG calls for EU to relax ownership laws as Brexit concerns mount

IAG has pleaded for the EU to overhaul its “arcane” airline ownership laws, which rivals and analysts warn could force the owner of British Airways and Iberia to buy out a quarter of its shareholders or risk being broken up after Brexit. Willie Walsh, CE of IAG, told the European Parliament Tuesday he was “confident” the company’s structures would survive Brexit and meet the EU’s strict licensing rules. But, in his first admission of potential challenges ahead, Mr Walsh called for the UK and EU to reach a comprehensive air transport agreement that “should also clarify” that UK nationals would count towards the EU ownership requirements, even after Brexit. Walsh said the EU “operates under an arcane system regulating the ownership and control of airlines”, and called for the rules to be relaxed.  “Those structures are unnecessary,” he said. “I would prefer to see a situation whereby we don’t have to replicate [them].”  For an airline to operate routes within the EU, it must demonstrate that it is effectively owned and controlled by EU nationals, with at least 50% of its shares held by EU nationals. This poses a problem for UK airlines after Brexit, when their UK shareholders will no longer be classed as EU shareholders. Several independent estimates all point to IAG falling below 50% after Brexit, a problem shared with other airlines.  Senior EU officials, analysts and rivals of IAG have told the Financial Times that, unless the UK and EU reach an agreement to waive the issue, IAG will be forced to spin off part of the group or buy out up to a quarter of its shareholder base in order to maintain lucrative EU flying rights.  Andrew Lobbenberg, head of transport equities at HSBC, told the FT: “After Brexit, we think IAG will need to be demonstrably an EU-owned and controlled airline. But it is unclear how that gets to be the case.” <br/>