UPD(10.June 2022): Niceair cancelled all flights to the UK until the end of June 2022.
The newest virtual Icelandic airline Niceair got into sudden troubles with flights to the UK. Flugblogg with the assistance of additional sources looked for the reason.
The first Niceair flight to Stansted (ICAO: EGSS) in London went well, however, British authorities prohibited taking passengers on board for the return flight to Akureyri (ICAO: BIAR). Niceair’s plane, operated by HiFly Malta, flew empty to Keflavik (ICAO: BIKF), while Niceair’s passengers were delivered by Icelandair. After this, all British destinations became unable to book on the Niceair website, Fluglogg reported earlier. Niceair’s CEO Thorvaldur Ludvik Sigurjonsson told Flugblogg, that there is no clear picture of why the flight was prohibited. However, the answer can be found in the aviation agreements between UK and Iceland, which changed after the Brexit.
Prior to the UK completing Brexit on 31 December 2020, services within the European Economic Area (EEA) were governed by a treaty signed in Porto in 1992, which grants 9th Freedoms of the air. It means any airline within the EEA can fly anywhere it likes within the EEA. This is why Ryanair, Easyjet, or Wizzair exist. During the final stage of the Brexit completion, Iceland and the UK signed a new treaty in December 2020. The treaty came into effect on 01 September 2021.
The explanation of Brexit for Iceland states that “Iceland and the UK have also signed an air transport agreement which for the most part guarantees Icelandic and British flight operators the same air traffic rights as they‘ve had through the EEA Agreement”.
Article 4, section 2(b)(i) of the post-Brexit treaty requires that an airline designated by Iceland be established in the territory of Iceland, or that an airline designed by the UK be established in the territory of the UK. Thus, neither the UK nor Iceland can designate an airline based in Malta (or Portugal such as the HiFly parent company) to fly between Iceland and the UK. Therefore, the likes of Icelandair, PLAY, British Airways, Easyjet, Jet2 or TUI would potentially have the right to sue in court for breach of a treaty.
There are separate rules allowing an EU-based airline to fly between the UK and any point in the EU, but this doesn’t apply to Iceland, which is not an EU member. Therefore, HiFly Malta might not be allowed by treaty to fly between Iceland and the UK, even if the UK or Icelandic governments should choose to designate HiFly Malta as a suitable airline.
On 26 May 2022 UK CAA granted HiFly Malta a Foreign Carrier permit to fly between Akureyri and both London-Stansted and Manchester from 02 June 2022 to 29 October 2022. That’s why Niceair and HiFly Malta might have thought they had permission to fly. However, according to the representative of the UK aviation authorities, it was revoked later: “The bilateral agreement between the UK and Iceland covers scheduled operations. Whilst this permit was issued on 26 May it has since been suspended”.