PARIS/BRUSSELS: Spain, Ireland and Hungary have tried and failed to loosen EU airline ownership rules in a draft aviation deal with the UK, two people with knowledge of the matter said, out of concern about Brexit's impact on British Airways owner IAG, Ryanair and Wizz Air.

France and Germany are said to have rejected a softening of longstanding rules that require EU airlines to be owned and controlled by EU nationals or else lose their licences.

While the ownership issue poses no immediate threat to flights, it brings a longer-term challenge to some of Europe's biggest aviation names, with or without a trade deal.

British investors will be deemed non-EU after the Brexit transition ends on Dec. 31 - a headache for airline groups with EU-licensed carriers and large UK shareholder bases. "There's been a last-ditch effort from a few member states to get something more liberal in the agreement on ownership and control," said an aviation source briefed on the discussions.

"There is not a hope in hell of it happening," the source added. "The big pushback came from France and Germany."

Spokespeople for the European Commission and the governments of Britain, France, Germany, Hungary, Ireland and Spain declined to comment or did not respond to Reuters questions.

London and Brussels have for months been negotiating a post-Brexit aviation accord to accompany a broader trade deal. The trade talks appeared to be on a knife-edge on Friday, with time running out for an agreement.

But the rebuff to Spanish-led efforts means that even a deal breakthrough would leave ownership problems unsolved.

They are particularly acute for IAG, which also owns Ireland's Aer Lingus and Spanish-based Iberia and Vueling. A large UK shareholder base and a 25% stake held by Qatar Airways will leave EU investors in a clear minority.

Ryanair boss Michael O'Leary predicted recently that Brexit could force a breakup of IAG, in comments dismissed by the UK-headquartered group, listed in London and Madrid. The Irish low-cost airline acknowledges that Brexit will swing its own non-EU shareholders into a majority, and has warned that they stand to lose their votes and the right to buy new shares in the absence of a deal granting more flexibility.

Even including UK investors, EU ownership has previously fallen close to 50% at both IAG and Wizz Air - listed in London and based in Budapest. To stay compliant, IAG barred non-EU share purchases for most of last year, while top Wizz shareholder Indigo Partners sold part of its stake.

EasyJet, reliant on its Austrian carrier for some routes post-Brexit, is also trying to bolster its non-British EU investor ranks, which currently hold about 45% of the group.

All the affected airlines maintain they are Brexit-ready, with ownership compliance strategies vetted and approved by national authorities under Brussels supervision.

"Last year, IAG's airlines submitted plans on ownership and control to the national regulators in Spain and Ireland," a group spokeswoman said. "Those regulators confirmed that the plans would satisfy EU ownership and control rules in the event of a no-deal Brexit." As the same governments' failed initiative shows, however, concerns persist that the compliance efforts may be unsustainable, or open to legal challenge by competitors. Stripping votes may restore European control but not ownership. Among other moves, IAG's transfer of most Iberia voting rights to retailer El Corte Inglés might not amount to relinquishing "decisive influence on the running of the business", as the critical EU regulation defines control.