European aeronautical manufacturing firm Airbus has voiced concerns over the negative effects that Britain leaving the EU could have on the aviation industry.
Although headquartered in France, Airbus relies on the UK to produce the wings for all of its commercial aircraft; a process which sees the firm spend £5 billion per year on British suppliers. In addition, employees make around 80,000 trips between the EU and the UK every year. With this in mind, Airbus Chief Executive Tom Enders has been outspoken about the lack of clarity surrounding the UK’s planned departure from the European Union, and the potential of regulatory clashes and uncertain trade unions between British and EU aviation industries.
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One of the main issues facing Airbus is uncertainty surrounding the UK’s continued participation in the EU aviation safety certification agency (EASA) – the regulatory body which governs civilian and environmental aviation safety in the EU. The body provides a single regulatory and certification process among member states, significantly simplifying the implementation of aviation standards across multiple nations.
However, should the UK decide on a “hard Brexit” – a brisk departure from the European Union without appropriate trade agreements in place – its EASA membership is not assured. This could prove to be a giant headache for Airbus, as Chief Executive Tom Enders wrote yesterday in the Financial Times: “Aerospace manufacturers, whose products must meet rigorous safety and certification standards, cannot let political whims drive the crucial issue facing our industry: No certification, no-fly … Hard borders and regulatory divergence risk blocking trade, creating supply chain logjams and causing our business to grind to a halt.”
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In addition, Mr. Enders pointed to the fact that the UK “faces being left out” of space and defense programs which enable military relationships as well as space research programs, unless it provides clarification on its EU departure terms.
Airbus is an aviation giant, part of a global jetliner production duopoly with rival US firm Boeing. As well as producing commercial jets including its flagship Airbus A380 – the largest passenger jet in the world – the company also has divisions focused on the manufacture of helicopters, military defense and space technology.
Potentially due to today’s concerns, stocks in Airbus are down -3.13%, bringing per-share prices to 92.43 Euros. The firm currently has a market cap of 71.58B Euros.
Featured image: La Tribune / Reuters
