Airbus's latest risk assessment of the UK's withdrawal from the European Union could still create short-term production disruption even if it takes place with a trade and transition agreement in place.
The airframer says that, even under this orderly withdrawal scenario, additional costs of trade procedures alone could cost its UK-related aerospace network up to €1 billion per year, based on an Organisation for Economic Co-operation and Development study.
Airbus adds that this increased cost, along with airworthiness considerations and labour movement are "critical issues" for the company.
Harmonisation of the regulatory framework, and clarity over the customs union, are crucial to Airbus's decision strategy regarding investment in the UK.
"They need to be addressed urgently," says the company.
While an orderly 'Brexit', featuring a post-withdrawal agreement and transition period, would be a "much better outcome" than an alternative no-deal scenario, Airbus says it would still entail a "significant amount of risk" and be "difficult to manage".
It believes the current transition period, running to December 2020, is too short for both the governments involved and for Airbus, which needs to reach new adjustment agreements with its UK suppliers.
"The necessary change from an old to new framework contains inherent risks for all involved elements like data, systems [and] supplier readiness," it says.
"It is likely that short-term production disruptions of one or two weeks may occur post-transition due to the supply ecosystem not [being] fully ready."
Airbus says it needs to monitor carefully any new investment in the UK and "refrain" from extending its UK supplier base until it understands the nature of the future UK-EU relationship.
Source: Cirium Dashboard
