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Airline Cartels: Ec Action

Volume 489: debated on Thursday 22 October 1987

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3.14 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will make a Statement on the action taken by the European Commission in its attack on air cartels, and on the present position concerning the request made by the Commission to the 10 airlines involved that they submit, by 14th September, further information on how they plan to change their agreements where necessary.

My Lords, I understand that all 10 airlines involved have now responded and that the Commission is now considering what further action to take. This is of course a matter for the Commission. But I can say that the Commission, like the British Government, puts its top priority on securing adoption by the Council of Ministers of the aviation liberalisation package and sees its action with the airlines as supporting that objective.

My Lords, while it is not the fault of the Minister, is he aware that I shall believe that real action has taken place on the European front when I see it, especially as some two years ago, on 21st November 1985, the Government informed this House that their patience on this matter would run out by the end of 1986. In view of this interminable delay, which really does seem to be never-ending, might I ask the Minister whether we can take it that the Government are giving every support to British Airways in the unilateral action it is now proposing to take in the hope of making some progress in this matter?

My Lords, I can assure the noble Baroness that I am just as frustrated with the lack of progress as she is. The Government welcome the initiative of British Airways as a useful step towards a more competitive environment. We do not believe it will impact directly on the consumer at least in the short term. An airline's ability to offer cheaper fares depends upon the relaxation of the regulatory controls. Hence the most important thing is to get the aviation package back on the Council agenda as soon as possible and get it agreed.

:My Lords, might I reply to that and the matter of the short-term benefits which the Minister raised? Is he aware that British Airways, by ending the commercial agreements that it has with 11 other European airlines by the end of March, will be able to do away with what I would call the iniquitous pooling arrangements which subsidise inefficient airlines and give customers no choice?

My Lords, that is indeed true. However, we still will not get as far as the other measures we want within Europe—that is, multiple designation and lower air fares—but it is definitely a step in the right direction.

My Lords, is the Minister aware that I should be glad if we got somewhere on one matter, never mind several?

My Lords, may I raise in this connection a somewhat different matter and the Minister will tell me if I am wrong? In the event of a liberalisation agreement being reached, will this mean increased flights possibly to the United Kingdom? Is the Minister aware of a statement made by the chairman of the Civil Aviation Authority as recently as 14th October that a strict limit on flights throughout Britain has been threatened by the CAA? The chairman went on to say that ultimately the volume will have to be capped. He said that there may have to be the use of alternative airports, including Manchester and Birmingham. Is this likely to be the effect if liberalisation takes place on the scale which is envisaged?

My Lords, that is a little far from the Question. There is undoubtedly a capacity problem in the South-East of England. If liberalisation takes place there probably will be more flights. Whether they will all be at peak hours, for instance, one cannot tell. At the moment of course there is in any case a terrific expansion of flights from regional airports such as Manchester and Birmingham, both of which I managed to visit during the recess. Both airports are showing a very positive increase in activity at the moment.