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Operation of Air Services (Amendment) (EU Exit) Regulations 2020

Debated on Wednesday 20 January 2021

The Committee consisted of the following Members:

Chair: Mark Pritchard

Anderson, Lee (Ashfield) (Con)

† Charalambous, Bambos (Enfield, Southgate) (Lab)

Cummins, Judith (Bradford South) (Lab)

Gibson, Peter (Darlington) (Con)

Girvan, Paul (South Antrim) (DUP)

Grady, Patrick (Glasgow North) (SNP)

Holden, Mr Richard (North West Durham) (Con)

Johnson, Dame Diana (Kingston upon Hull North) (Lab)

† Jones, Mr Marcus (Vice-Chamberlain of Her Majestys Household)

† Kane, Mike (Wythenshawe and Sale East) (Lab)

† Maclean, Rachel (Parliamentary Under-Secretary of State for Transport)

Mohindra, Mr Gagan (South West Hertfordshire) (Con)

O’Brien, Neil (Harborough) (Con)

Randall, Tom (Gedling) (Con)

Sambrook, Gary (Birmingham, Northfield) (Con)

Smith, Nick (Blaenau Gwent) (Lab)

† Throup, Maggie (Lord Commissioner of Her Majestys Treasury)

Bradley Albrow, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee

Wednesday 20 January 2021

[Mark Pritchard in the Chair]

Operation of Air Services (Amendment) (EU Exit) Regulations 2020

I beg to move,

That the Committee has considered the Operation of Air Services (Amendment) (EU Exit) Regulations 2020 (S.I. 2020, No. 1632).

These regulations are made under the European Union (Withdrawal) Act 2018 and the instrument applies to the United Kingdom. The regulations ensure that EU regulation 1008/2008 on common rules for the operation of air services continues to function correctly in UK law after the transition period. They do so by amending the Operation of Air Services (Amendment etc.) (EU Exit) Regulations 2018. The need for today’s SI has arisen because the EU amended regulation 1008/2008 after the 2018 regulations were made.

In May last year, EU regulation 2020/696 inserted provisions into regulation 1008/2008 to address problems caused by the slump in air passengers resulting from the covid-19 pandemic. It also inserted powers for the Commission to extend the new provisions by delegated acts. The Commission used those powers and made further amendments to the regulation via two delegated regulations adopted on 16 December 2020, which extended two of the new provisions until the end of 2021, rather than them expiring at the end of 2020.

The extended provisions allow airlines in financial difficulty to retain their operating licences, subject to certain conditions, and allow airports to urgently replace ground handling providers, should they suddenly cease trading. I will describe those provisions in more detail shortly.

The SI was made using the made affirmative procedure as the only means to bring it into force before the end of the transition period while ensuring parliamentary scrutiny. As I have noted, the most recent EU amendments were not adopted until 16 December. Only then was it possible to determine the precise content of this SI. The SI was laid before the House on 23 December, the earliest opportunity after the Commission’s adoption of the delegated regulations.

The first of the two provisions concerns air carrier licensing. Regulation 1008/2008 requires the Civil Aviation Authority to revoke or suspend the operating licence of an air carrier in financial difficulty and replace it with a temporary licence, but such action risks the integrity of the air carrier in the eyes of investors and customers, raising concerns about its viability. Normally, such actions are justified to tightly regulate carriers in financial difficulty, but during the covid-19 pandemic, all air carriers have suffered significant decreases in revenues, and a more flexible response is required.

Regulation 2020/696 inserted a new provision allowing regulators not to revoke or suspend operating licences where the carrier is in financial difficulty, providing a financial assessment is undertaken, safety is not at risk and there is a realistic prospect of financial reconstruction within 12 months.

The second extended provision concerns ground handling. Where a ground handler has ceased trading before the end of its contract, the new provision allows airports to choose a new provider directly for a limited period rather than undertaking a tender process. Reduced demand increases the risk of sudden failure of ground handling companies. The new provision ensures minimal disruption at airports. References to the ground handling directive are replaced by reference to the Airports (Groundhandling) Regulations 1997, which transpose the directive. Provisions relating to the Commission’s delegated powers are revoked, because they are no longer relevant to the UK.

This SI demonstrates that the Government are committed to ensuring a fully functioning regulatory framework for the aviation industry. The impacts of the pandemic will continue for some time to come, and the provisions that I have described provide the Civil Aviation Authority and airports with additional flexibility to respond. I therefore commend the regulations to the Committee.

It is a pleasure to serve under your chairmanship, Mr Pritchard, as ever.

We welcome this statutory instrument, which brings the updated EU regulation into UK law and ensures that the current temporary provision can continue as it is today, allowing for airlines to retain their operating licences for ground handling services to go on uninterrupted as the aviation sector continues to work through this critical time. Over the next weeks and months, it is going to be all about resilience for the industry.

As the constituency MP for Manchester airport, I was pleased to be asked by Government to serve on the Government taskforce when Thomas Cook collapsed. I want to place on record my gratitude to the former Business Secretary, the Department for Transport and others across Government for their support to staff, suppliers, stranded holidaymakers and many former employees who live in my constituency.

The airline’s collapse hit hard, with hundreds of dedicated long-term staff suddenly out of work. We are facing a similar situation in the current pandemic. We had already seen this happen in years past, with Monarch and the swift demise of Flybe. There is much work to be done to ensure that airline finances are more resilient. I look forward to working with Ministers and Government to ensure that that is the case, to prevent even more jobs and routes being lost to the UK. We have a world-class aviation sector and we need to keep it that way.

It is right that these regulations extend UK operating licences now, to remove the financial burden and give airlines a fighting chance of survival. That brings me to my recurring request—a request echoed by every major airline, airport and ground handling service company across the UK. Those pleas seem to have fallen on deaf ears at Her Majesty’s Treasury. The sector will not survive, certainly not as a global leader, without more support from Government.

I must mention my support for the Treasury’s recently announced business rates relief for airports and ground handling services. Although those moneys are close to bridging the gaps in the sector, I urge the Minister to go back to the Treasury and work with it to provide a robust financial support package for the industry, to help the UK once again fly as a world leader. We want that sector-specific deal and are still calling for it on this side of the House.

The sector is still waiting for the Government to set out a clear plan for how they expect restrictions can be lifted with the vaccine roll-out. We need certainty and confidence if the sector is to take off and regain its place as a bastion of the British economy.

I thank the hon. Gentleman for his comments and the Committee for its consideration of the regulations. He put on record his thanks to the aviation sector, and I wish to associate myself with those comments. We all want a thriving aviation sector. This is part of our response to enable the sector to blossom throughout the pandemic.

It is the duty of a responsible Government to ensure that our statute book continues to function correctly after the end of the transition period, and that is exactly what the instrument will do. These regulations will make the changes necessary to ensure that the provisions of retained regulation 1008/2008 continue to function properly following the end of the transition period. They provide additional temporary flexibilities in responding to licensing issues, where airlines face financial difficulty and where airports need to urgently replace ground handling providers.

Turning to the hon. Gentleman’s comments about support for the sector, he will know that the airport and ground operation support scheme, announced on 24 November, will provide support for eligible businesses, subject to certain conditions and a cap per applicant of £8 million. The Department recognises the severe impact that covid-19 has had on travel. Work continues in order to understand how best industry can be supported now and in the future, as we hopefully emerge from the pandemic. I thank the Committee and hope Members will join me in supporting these regulations.

Question put and agreed to.

Committee rose.