Cool your jets, Michael O’Leary – Brexit unlikely to ground Ryanair

Every industry wants its interests to be uppermost in the trade negotiations between the UK and the EU, but few companies shout as loudly as Ryanair. In its latest dispatch, the Irish carrier warned there was “the distinct possibility of no flights between Europe and the UK for a period after March 2019 in the absence of a bilateral deal”.

Technically speaking, Ryanair is correct. Once the UK leaves Europe’s “open skies” agreement, something will have to take its place. Historical World Trade Organization rules, as the company says, don’t cover aviation. So, yes, it is just about conceivable that Stansted, Gatwick and other UK airports dominated by tourist traffic to the EU could grind to a halt temporarily.

But, rather than being “distinct”, the possibility is surely remote. Reaching agreement on rules to cover UK/EU flights ought to be relatively easy because the alternative is horrible for both sides. Every hotelier from Corfu to the Canaries would be screaming for a deal if there were a chance that British tourists wouldn’t arrive in 2019. Similarly, Lufthansa would probably prefer its Heathrow service to continue without interruption.

Ryanair’s Michael O’Leary should calm down. The overall trade negotiations may prove to be hellish, but it is still reasonable to assume that planes will fly between the UK and EU in April 2019. Other people, like the five million citizens unsure of their right to remain, have bigger worries.

Blocking of Deutsche Börse merger no great loss for LSE

Margrethe Vestager, the EU competition commissioner, is adamant: the decision to block the £21bn merger between the London Stock Exchange and Deutsche Börse had nothing to do with Brexit.

Nobody can prove otherwise, of course, since the commission has wondrous models to assess when a “de facto monopoly” is created. In the short version, it demanded that the two parties sell a modest Italian bond-trading platform to preserve competition in the clearing of such fixed-income instruments. The LSE and Deutsche refused. Thus the deal had to die.

But, as a postmortem, this account isn’t remotely comprehensive. The strong suspicion remains that Brexit pushed events in only one direction.

This deal, remember, was unveiled in those faraway days when the UK referendum was seen as a piece of political theatre with a dull ending. After the vote for Brexit, nervousness in the German financial establishment was obvious. The two companies planned to combine under a UK holding company, and while the chief executive would be Deutsche’s Carsten Kengeter, he was deemed in some quarters of Frankfurt to be dangerously Anglophile. The City had the opposite fear that trading and clearing activity would be sucked to the continent over time.

Was the Italian role crucial or incidental? In their original sop to the commission, the LSE and Deutsche agreed to sell a UK and French clearing house to their Paris-based rival Euronext. Then the commission demanded at the 11th hour that MTS, the Italian platform for trading government bonds, be thrown into the deal. Milan, it seems, hated the idea of being a bargaining chip in an Anglo-German deal that would simultaneously advance French interests. But nobody seems to have tried terribly hard to change minds.

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