TUI Group is reportedly negotiating a transitional agreement with the UK Civil Aviation Authority (CAA) which would allow it to postpone rejigging corporate ownership structure in the case of a no-deal Brexit, The Sunday Telegraph has reported.

The leisure specialist is afraid that it would lose some traffic rights in the European Union if Brussels and London do not agree on the terms of the UK leaving the bloc.

According to European Union law, carriers have to be majority owned and controlled by EU entities to have access to the open skies in the bloc. As such, they are allowed to operate freely between any two countries in the EU, regardless of the whereabouts of their corporate headquarters. In addition, EU carriers benefit from bilateral air traffic agreements between the bloc and third countries and can operate to numerous markets from the whole EU, not just their home country.

The largest shareholder of TUI Group, which is listed on the London Stock Exchange, is Russian Alexei Mordashov who owns a 24% stock. A further 23.3% share is controlled by US-based investors, while British investors hold a 15.1% share. The remainder is controlled by entities and individuals from the other EU countries.

Such a structure means that once UK investors are no longer counted as EU shareholders, the group would cease to be majority EU owned.

The group could launch a buyback scheme or rejig its ownership structure in other ways to comply with the post-Brexit requirements. easyJet said it would consider such a move in order to preserve its EU flying rights.

However, TUI Group is reportedly trying to avoid taking such a step before the post-Brexit agreements are fully agreed upon. If the UK and the EU reach an agreement, changes in the corporate structure might not be necessary to maintain access to the EU market.

TUI Group currently owns a number of carriers both in the UK (TUI Airways) and in the continental EU (TUI fly (Germany), TUI fly (Belgium), TUI fly Nordic, TUI fly (Netherlands), and Corsair International).