By Alistair Smout
LONDON (Reuters) – Brexit talks have made a “shocking” lack of progress which will hurt Britain’s economy over the coming months, the chief executive of British Airways’ owner, IAG, said in the company’s annual report on Tuesday.
Britain is due to leave the European Union on March 29, but Prime Minister Theresa May has not yet secured a deal that Britain’s parliament will accept.
IAG chief executive Willie Walsh said this uncertainty was bad for the British economy.
“I think it is inevitable that Brexit will have a greater impact in the months ahead. It has been quite shocking to get so far in the political process without having any real clarity about the future,” Walsh said in the firm’s annual report.
“All the credible forecasts I’ve seen predict that Brexit will have a negative economic impact in the short to medium term that is likely to damage consumer confidence and act as a further drag on business investment.”
However, IAG judged that even in a no-deal scenario, “Brexit will have no significant long-term impact on the group.”
IAG Chairman Antonio Vazquez said the firm was confident it would be able to comply with relevant ownership and control rules after Brexit.
IAG, which owns Spanish airlines Iberia and Vueling and Ireland’s Aer Lingus in addition to British Airways, has faced questions of how its shareholder structure will comply with EU rules after Brexit.
After Brexit, British shareholders will no longer count towards an EU requirement that airlines must be majority-owned by EU nationals in order to fly between two locations within the bloc.
The EU has proposed a provisional arrangement to mitigate the impact of a no-deal Brexit on airlines, allowing a six-month window to fully meet ownership requirements.
(Reporting by Alistair Smout, editing by David Milliken)