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Complex Part Transactions Could Be Endangered By No-Deal Brexit

Aviation attorney sees problem with some repairs if the UK leaves the EU with a No-Deal Brexit.

The selection of Boris Johnson as Conservative prime minister alters somewhat, but perhaps not decisively, the prospects for Brexit, according to Jason Dickstein, aviation lawyer and president of the Modification and Replacement Parts Association (MARPA). Regulators and aftermarket companies have been preparing for Brexit for a awhile, but Dickstein thinks some essential MRO and part transactions are still vulnerable to interruption.

The first question is whether there is a negotiated exit of the UK from the European Union or a no-deal, hard exit. “If they get a deal, that is better for aviation,” Dickstein says. “But it is important to plan for the worst case, no deal.”

Dickstein advises keeping an eye on Johnson and the queen for a leading indicator for this question. The new prime minister may ask the queen for a prorogation of parliament, essentially ending one parliamentary session before the next one. The queen would face some tricky constitutional questions in deciding whether to prorogue parliament at Johnson’s request. But if Johnson asks and the queen delivers a prorogation, Dickstein says that probably means a hard Brexit will happen with no deal by Oct. 31.

The EU has repeatedly said it will not negotiate a new deal nor will it extend the October deadline further. And Johnson campaigned on not accepting the previously negotiated deal. So Dickstein thinks a no-deal Brexit is likely in any case.

Fortunately, aviation regulators have been planning for how Brexit affects U.S.-UK relations and how it will affect UK-EU relations.

The FAA and UK CAA have already negotiated two agreements, one for a no-deal Brexit and one for a negotiated Brexit. These two agreements are ready for signature and implementation as soon as it is clear which way the exit will occur.

The EU has recognized that the UK’s departure from the Union poses real problems for aircraft aftermarkets, so it has agreed to allow a grace period during which UK CAA certification of parts will be accepted in the EU. In addition, some UK MROs like Aeroco have received EASA certification so their repairs will not be affected by Brexit.

So far, so good. But “things could fall apart in third-party relationships,” Dickstein warns. For example, there are about 1,700 EASA-certified repair stations in the U.S. “They must follow MAG [Maintenance Annex Guidance] and can’t take UK parts.”

It thus seems U.S. repair stations working on U.S. aircraft will be able to take UK-certified parts, but not when these same repair stations are working on components for EU-registered aircraft, because the MAG will not be updated to reflect the post-Brexit environment. “There will thus be a period when simple transactions can go through, but more complex transaction could get hung up,” Dickstein advises.

The problem has been brought to the attention of FAA, but the U.S. agency has been busy with so many other problems, no solution has been found yet. And Dickstein says EASA is not allowed to negotiate a solution until Brexit actually happens, which may be too late to avoid difficulties. “They are doing all they can legally, but their hands are tied by EU law . . . There may be some aircraft grounded because they can’t get the right parts with the right documents.”

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