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Brexit 'not helping' UK aerospace sector: trade body

"The Brexit process is not one that is helping our reputation as sort of solid, global citizens," claims Paul Everitt, chief executive of the UK aerospace and defence trade association ADS.

Speaking during a 21 November parliamentary hearing on the impact of Brexit on the country's aerospace sector, Everitt said aerospace suppliers depended on "globally" recognised regulatory oversight in order to address international markets.

Noting that the Americas, Europe and China represent three major regions for aerospace manufacturing, he says: "If we don't have a regulatory regime that is recognised globally, then we cannot sell our products."

Should the UK not remain under European Aviation Safety Agency jurisdiction when it leaves the EU in March 2019, an "alternative arrangement" must be in place.

"At the moment, our fallback position is that we would invite the European Aviation Safety Agency or the [US] Federal Aviation Administration to certify our facilities and our products – and we would pay [them] for the privilege of doing that," he says.

This would involve a "school of special measures" under which international authorities would "come over and help us out". But Everitt adds: "That's not a long-term solution, because the costs are many, many times what our current cost base would be."

In the "very short term", Everitt says UK suppliers will have "no choice" but to absorb the additional costs to continue serving existing contracts. But in the long term, he suggests, that could make UK suppliers less competitive. "It would be much more difficult to persuade people that they should be continuing to invest in the UK and stick with the UK," he says.

The UK Royal Aeronautical Society's president-elect, Simon Henley – who also spoke at the hearing, along with Airbus UK senior vice-president Katherine Bennett – is doubtful the country's Civil Aviation Authority is in a position to reassume responsibilities that have been handled on a European level since EASA's establishment.

"There is no indication, if anything there is negative indication, that all our expertise – UK [regulatory] expertise vested in EASA – will want to come back," he says. "Professionally, it doesn't make sense. If you are working in a global body, there is very little attraction professionally to come back to work in a body with a smaller scope. So we would almost have to start again, and those resources are really not there."

He notes that EASA was established over several years that included a five-year interim phase during which national regulators collaborated through the Joint Aviation Authorities organisation. "That was with all expertise actually being pulled from existing bodies," Henley adds.

"I think the [UK] CAA would feel very nervous to stand up in two years or even two and a half years," he says. "That's a very ambitious target to rebuild that capability."

For Airbus, the prospect of the UK handling all regulatory requirements on a national level is likely to reduce the influence of the country's aerospace sector on an international stage. Referring to the UK aerospace industry as a whole, Bennett says: "We have the largest aviation sector in Europe. Surely we should have a strong voice."

However, she says re-establishment of national authorities will be a step back from ongoing efforts to align regulations at International Civil Aviation Organization (ICAO) level. "We don't want double regulation... Going back to the CAA days is not optimal for anyone in this industry," Bennett says. She notes that greater international harmonisation by ICAO is "where we want to go", adding: "We don't want to go back to a little-island mentality."

Bennett says the potential re-establishment of a national UK regulatory regime would have no impact on Airbus's ability to influence EASA's rulemaking, because "we can make our points known" through the airframer's presence in other EU member states. But referring to the country's entire aerospace sector, she says: "I think it is a shame for the UK."

ADS's Everitt acknowledges that existing customers of UK aerospace companies will not "willingly or easily" find alternative suppliers, because "there is always a cost associated with realigning supply chains". Nevertheless, he warns: "Clearly, depending on what the future looks like, people would make those decisions."

Asked whether a reassertion of national regulatory authority by the UK would help the country's aerospace sector to find new international business opportunities post-Brexit, Everitt says: "A chaotic departure from the EU would make it even more difficult to encourage businesses to want to invest here and customers to see us as a place to purchase goods and services."

He indicates, in particular, the importance of EASA's regulation being aligned with the FAA's, and says any national post-Brexit regulation will need to be similarly harmonised.

"Our route to market is very much facilitated by the regulatory regime. So without that regulatory regime, we don't have a route into global market, whether these are European, US or China, because of the mutual-recognition arrangement," he says. "So not having that arrangement will make it more difficult for us to be able to access those important markets."

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