Iberia could be grounded by Brexit

The collateral damage that could be caused by Brexit is becoming more real by the day, at least for Spanish airline Iberia.

Airlines that fall below the 51% threshold for EU ownership will not be able to operate within Europe if the UK leaves the UK with no divorce deal signed.

Iberia is owned by Bristish Airways parent company IAG, and therefore the EU regulations may become a big problem, says the Brussels-based corporate law expert Miguel Troncoso.

"The issue right now is that of ownership rather than control, it seems, since Iberia has told the European Commission that although they are majority British owned, the control of the airline is in the hands of Spanish companies."

Iberia carries 19 million passengers a year and is a major employer in Spain with over 7,000 workers.

While IAG wholly owns the economic rights of Iberia Holdings, the company says Spanish store El Corte Ingles owns 50.1 percent of the voting stake.

Thus, the Spanish government is confident that Iberia will be able to fly across Europe.

Yet, Troncoso still has concerns, he told Euronews: "I think, in the case of a 'hard Brexit', Iberia remains unable to operate.

"It is going to be very paradoxical since the system is unitary and there are no longer national systems, by virtue of the 2008 regulation.

"It is going to be paradoxical, that it will not be able to operate between Spanish airports, because Iberia does not comply with the ownership regulation required by the EU."

Madrid is responsible for granting and supervising the licence, but the EU Commission monitors whether this compliance is in force.

If it is not, Brussels could urge Spanish authorities to revoke Iberia's licence.