British based airlines warned they 'must move to EU after Brexit or lose major routes'

The warning comes less than a week before Theresa May is scheduled to trigger Article 50 

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The Independent Online

EU officials have warned UK-based airlines that they will have to relocate their headquarters to the EU or sell shares to EU nationals if they want to avoid seeing routes within continental Europe axed after Brexit.

According to the Guardian, representatives from easyJet, Ryanair and the Tui Group received the warning following a meeting with an EU Brexit taskforce last week.

To operate intra-European routes an airline must have a significant base on EU territory and a majority of their capital shares must be EU-owned. That means that some airlines would have to sell off shares after Brexit to maintain the rights to fly between cities like Berlin and Rome. 

The warning comes less than a week before Theresa May is scheduled to trigger Article 50 and could mean major restructuring within some of the largest UK airlines.

It could also potentially lead to job losses as a consequence of major companies relocating to Europe after Brexit.

The new regulation will be of particular concern to companies such as easyJet, whose primary business model is based on access to routes across the EU.

Britain could respond to the tough EU line in kind by introducing its own nationality rules for EU-based airlines.

Thomas van der Wijngaart, an aviation expert at the legal firm Clyde & Co told The Guardian that the rules could have big economic consequences for the UK.

He said: “It might be that carriers choose to have domestic flights [on the continent] operated by their new European operating licence, which would probably mean a reduction in staff in the UK.”

Ryanair said in a statement: "We will continue to adapt to changing circumstances in the best interest of our customers, people and shareholders."

EasyJet previously called for an aviation agreement between the EU and UK that is liberal and deregulated and that maintains the benefits of connectivity and low fares for European consumers, businesses and economies.

However, in comments sent to The Independent, it confirmed that as there is no certainty about the shape of the new aviation agreement between the UK and the EU, the company is taking steps to ensure that it can maintain its European network in any scenario.

Easyjet said: "The main element is to establish a EU operating company to maintain our flying rights within the EU. 

"This operating company would need to be EU owned but as easyJet currently has 49 per cent EU shareholders this will not present a challenge.

"In any scenario, easyJet's headquarters would remain in Luton and easyJet will also remain listed on the London stock exchange."