U.K.-based airlines including easyJet (EJTTF) and Ireland-based Ryanair (RYAOF) have been told that they must relocate their headquarters or sell shares to European nationals if they wish to continue flying routes within Europe after the U.K. leaves the European Union.
According to the Guardian, officials have told executives at major U.K. carriers that they need to have a significant base in the EU and that a majority of their capital shares must be EU-owned in order to continue operating routes criss-crossing the continent.
The economic consequences of failing to make the move could prove serious for the budget airlines, whose business models are predicated on serving intra-Europe routes. The U.K. is the largest aviation industry in Europe, and Britain could push back by barring EU carriers from operating domestic U.K. routes.
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Although Ryanair is headquartered in Dublin, only 40% of its capital shares will be held by EU nationals after citizens of the U.K. are no longer included. In addition to easyJet and Ryanair, British Airways owner IAG and the Tui Group also received the notice.