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Airports Slot Allocation (Alleviation of Usage Requirements) (No. 2) Regulations 2022

Volume 823: debated on Thursday 14 July 2022

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Airports Slot Allocation (Alleviation of Usage Requirements) (No. 2) Regulations 2022.

My Lords, these draft regulations will be made under the powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021, or ATMUA. Taking the opportunity of our departure from the European Union, ATMUA created a more flexible set of powers for Ministers to implement slot alleviation measures. We are now able to adapt our approach to best support the UK’s own specific circumstances.

We will all have seen the disruption that holidaymakers and other passengers have faced at some of the UK’s airports, particularly over the recent Easter and half-term breaks. There have been unacceptable queues, delays and short-notice cancellations of flights. The persistent impact of the Covid-19 pandemic has presented challenges for the aviation sector as it recovers, and there have been difficulties ramping up operations to meet the high levels of demand. Airlines, airports and the myriad other businesses that support aviation operations have struggled to recruit and train enough staff. Many other airports around the world are struggling with similar challenges. There have also been delays due to European air traffic control restrictions, strike action and airspace closures. This has resulted in short-notice cancellations of flights and considerable disruption for passengers.

The Government are doing everything in their power to support the aviation industry and ensure that passengers can fly with confidence over the summer. On 30 June, the Government set out a 22-point plan to support the aviation industry to avoid further disruption so that all travellers can get away over the summer period. One of the key elements of this package is the slot amnesty to which these regulations relate. It offers carriers more flexibility to plan and deliver reliable schedules and it introduced a two-week window, which closed on 9 July, during which airlines were able to offer back 30% of their remaining slots for the summer season. This is a one-off measure to allow airlines to plan a realistically deliverable schedule for the summer, and in particular to reduce the risk of short-notice cancellations and delays. Critical to this will be the sector itself ensuring that it develops robust schedules that it is confident it can deliver.

Ordinarily, airlines must operate slots 80% of the time to retain the right to the same slots the following year; this is known as the 80:20 rule. When the pandemic initially struck, the 80:20 rule was fully waived to avoid environmentally damaging and financially costly flights. Following the UK’s departure from the EU and the passage of ATMUA, we were able to introduce a more tailored alleviation of slot rules in response to the pandemic as the situation developed. For summer 2022, our focus is on encouraging recovery following the success of the vaccine rollout, the removal of travel restrictions and the generally positive demand outlook for aviation. After consultation with the industry and consideration of the evidence, we determined that a 70:30 ratio was an appropriate usage requirement for the summer period. This includes an extended justified non-use provision, which helps carriers when they are operating in markets that are still restricted due to the pandemic.

However, in light of the severe recent disruption at UK airports, caused by the persistent impact of Covid and a tight labour market, we consider that further alleviation measures are justified for the current season, which runs until 29 October. On 21 June, we therefore published this statutory instrument, which set out our plan to offer carriers the two-week window when they can hand back up to 30% of their remaining slots per airport for the current season. This is a critical measure to allow airlines and airports to take stock of what they can realistically deliver. This has been our message to the airlines and airports, and the entire aviation sector; they must be able to provide the certainty of a deliverable schedule. There is no point in continually announcing short-notice cancellations when they suddenly realise that they do not have the staff to fly a planned flight.

This proposal was developed following a short consultation with airports and airlines and there was strong support for it, with the great majority of both airlines and airports supporting it.

The draft instrument covers England, Scotland and Wales. Aerodromes in Northern Ireland are a devolved matter, but in any event, there are no slot co-ordinated airports in Northern Ireland, so the Northern Ireland Executive agreed that it was not necessary for the powers to extend there.

One other issue is worth highlighting. If an airline does hand back one of its slots, it can only be one that would be flown at least 14 days after it was handed back. This will mean that we do not end up with lots of short-notice cancellations within that fortnight. Orderly communications with consumers will be essential. We also expect airports to maintain their communications with consumers to advise them on what they need to do in order to ease their passage through the airport.

This is a simple statutory instrument that does just the one thing. I look forward to hearing comments from noble Lords and I beg to move.

My Lords, I thank my noble friend for bringing forward the regulations before us, which I broadly support and welcome. I have a number of questions relating directly to the instrument and to the current situation. I understand that when a passenger buys an airline ticket, the simple measure of paying airport tax shows the airport and the airlines the number of people travelling on that particular day—so I am confused about why the numbers travelling seem to come as a complete surprise. I declare an interest: when I met and married my husband, he was an airline man and worked for a number of years with Delta Air Lines, Singapore Airlines and BOAC. As part of his responsibilities he was also director of Gatwick Handling.

Is one of the problems that airports and airlines are not themselves responsible for the ground handling operations, so that there is no joined-up operation from the moment that a passenger arrives at the airport and checks in their luggage? One word of advice, having married someone in the airline business, is to travel with hand luggage only so that, if you are offloaded, leaving the aircraft is a much simpler exercise. But I understand that for families and people going away for a long period that is not possible.

Do the Government have any plans to review the fact that ground handling operators are separate companies that are perhaps one step removed from the companies that passengers are paying for their services? I know that the airlines, airports and the Government are saying that they are doing all they possibly can to ensure a better experience than what we have been seeing since the May bank holidays earlier this year, but there still seem to be issues. How long does it take to train and give security clearance in particular to those working airside? I accept that we must take that extremely seriously, because that is where we are most vulnerable to a breach of security.

I welcome this amnesty. I offer a word of sympathy to the airlines and airports, which have probably been the hardest hit, alongside the hospitality and retail sectors. People were laid off. Willie Walsh said this week that, at the height of Covid, during the lockdown, only 2% of flights were operating. They had to grasp that situation and, given their ongoing overhead costs, save money as best they could, and obviously a lot of people who were in those positions have found work elsewhere.

Heathrow has asked for a moratorium on ticket sales for departures before 12 September. I pay tribute here to Simon Calder of the Independent, an expert in this field who does an enormous amount of work and is very helpful in advising passengers. He said that, after that announcement was made, when he tried to buy tickets—possibly yesterday—he found that a number of airlines were still selling tickets for before the magic date of 12 September. If that is the case, what comeback will there be? Those passengers may or may not read the newspapers and may or may not be aware of the issue. I have a further question on the impact of the amnesty. I want to establish whether, if an airline cedes a slot, it will recover the slot on the due date and there will be no economic loss to it.

I am one of the lucky passengers. I travelled during the May half-term. Although Ryanair may not be everyone’s favourite airline, I understand that it has the best figures for the fewest cancellations and the reliability and promptness of its flights. That week alone, it was estimated that between 2% and 4% of total flights were cancelled within a week of departure, compared with the normal rate of around 1%. Some 200,000 consumers were impacted by short-notice cancellations, as we are told in paragraph 7.4 of the Explanatory Note. It is not acceptable that 2.3 million passengers have been affected by delayed flights—approximately 43% of passengers arriving at or departing from UK airports. Given the importance of airports to the local economy in which they are based and to the national economy, that is obviously unacceptable.

Finally, paragraph 7.5 says that there will be 14 days’ notice when slots are ceded and that airlines are required to notify passengers of the cancellation of each flight at least 14 days before the date of the flight. Can my noble friend tell us what will happen if the airline fails to honour that commitment? It clearly is not happening. Anecdotally, a member of my family was caught up in this when they were actually in a taxi going to Heathrow airport. Having had a British Airways flight cancelled, she was then reallocated an EasyJet flight. When she was an hour from the airport, she was informed that that flight also was cancelled. So what redress will there be and what compensation will be given?

This is a deeply unfortunate situation in a major part of the economy, which is trying to do its level best to emerge as best it can from Covid times. I would like to think that one solution might be to consider ground handling operations being more hands-on with those closest to them. However, I hope my noble friend will give me the reassurance I am seeking for those passengers who have had less than 14 days’ notice, and, importantly, tell me how the airlines are required to inform passengers of a cancellation.

My Lords, I thank the Minister for her explanation, but I have to comment that there is something surreal about this SI. It talks about a lack of demand at a time when almost all airports, especially our largest—Heathrow and Gatwick, and one or two others—are struggling to cope.

The Government announced a grand plan of 22 points—this is one of them—and the Explanatory Memorandum talks of

“intervention to facilitate advance planning for a robust and reliable flight schedule.”

There is certainly a long way to go to achieve that, because it does not happen at the moment.

There are some misconceptions in the Explanatory Memorandum. It talks about “prolonged reduced demand”, and there is evidently not prolonged reduced demand. At the moment, government intervention and the situation at airports are artificially holding down demand. Anecdotally, I can point to several conversations that I have had with contacts, friends and relatives over the past couple of weeks in which they have said, “I’m not flying this summer. I would normally do so”. So demand has returned and recovered, certainly in the leisure market, but it is not being catered for.

I always smile when I read Explanatory Memoranda that try not to mention Brexit. This one does its best at paragraph 7.3 by talking about

“wider challenges to the UK labour market”.

The point is that Brexit is the wider challenge to the UK labour market, which means that there is likely to be a long-term labour shortage. So my first question to the Minister is: what progress has there been on the Government’s attempts to speed up the training and recruitment of additional workforce? The stories coming out of our airports are truly dire at the moment.

The impact of the Government’s efforts in the short term has been, as I said, to suppress demand to ensure that customers have a better experience, and I understand the good intention behind that. As a result, Heathrow is cancelling a percentage of flights and seats sold. Yesterday, there was a similar story in the Evening Standard about Gatwick. I am told today that Heathrow has specified the flights to be cancelled, which include Emirates flights. The Emirates airline is complaining loudly about this and has coined the memorable phrase “It’s Airmageddon”. It is very bad news for the aviation industry and for Britain that such a phrase is being used about our major airport.

I will be interested to hear the Minister’s explanation of how Heathrow has the right to specify the flights to be cancelled. I understand it having the right to say to airlines, “You must work within certain parameters”, but how can it choose a particular airline? How will that impact the aviation market, because it will distort it? We have had conversations in the past about the distorting effect of the slot process and how we can avoid that. Is it within the terms of the legislation that Heathrow can specify the flights to be cancelled?

My final point is that the two-week timeframe the Government gave the industry for cancelling slots seems very short. Is the Minister satisfied that the decisions were made with due care and attention, rather than in some kind of scramble by the industry to divest itself of some flights to fit the Government’s criteria? I would be particularly grateful for an answer about the Heathrow situation.

My Lords, since it seems fashionable, I declare an interest as a British Airways pensioner after a 20-year career in BOAC—that is how old I am—and BA.

The chaos at airports in recent weeks is indicative of a Government who have lost their grip. In recent days, Heathrow has asked airlines to stop selling summer tickets, data has shown that one in every 14 flights from Gatwick was cancelled last month and the chief executive of Menzies, which provides check-in and baggage services, has laid the blame squarely at the feet of Ministers. But this issue has not crept up overnight. The Government have had months to resolve it, yet—unbelievably—I am told the Transport Secretary did not hold a single meeting with aviation bosses during Easter or the jubilee weekend, despite the chaos at airports across the country. The only reason the Government are now bringing forward this instrument and facilitating the mass cancellation of flights is that they have been slow to act. By introducing these regulations, Ministers are conceding that airlines are not able to meet the pre-Covid demand that is now returning. Ministers cannot escape their responsibility.

I always try to make my interventions in debates such as this fairly small because the impact one has is somewhat limited, but at the end of the day this is an important event and a national disgrace. One way or another, the airline industry has failed to operate. The Government have offered the view that their 22 points published on 30 June would solve the problems. I decided to examine the 22 points to see what the Government have promised to do and whether they have done it.

Points 9 to 14 are about supporting passengers. This is desirable, but it is not what we want. Passengers do not want support; they want to fly on time, and that is what we must concentrate on. Points 15 to 22 are about recruitment and retention. Once again, they are worthy but too late to make much impact this summer, so I go back to points 1 to 8.

Point 1 sets out “expectations”, but does not actually say who is supposed to do what. Point 2 is these regulations. As I read the 22 points, it is the only one that requires any legislative action.

Point 3 says:

“We have strengthened industry-government working, by establishing a new weekly Strategic Risk Group, chaired by ministers and attended by airline, airport and ground handler CEOs to ensure they are prepared for summer and can meet the schedules.”

“Weekly” presumably means that there have been at least two meetings. Can the Minister affirm whether that is true? Crucially, did the chief executive officers actually turn up? Most importantly, what did the meetings achieve? What new initiatives or co-ordination that was lacking were achieved?

Point 4 is about establishing

“a weekly Summer Resilience Group with airline, airport and ground handler operational directors to help them work through their pinch-points in the aviation system as they emerge and work collaboratively on solutions.”

Again, how often has this group met? Was it attended by the operational directors of each of the appropriate companies? What did it decide and what points were overcome?

Point 5 says:

“We have established a joint Home Office and DfT Ministerial Border Group to identify and prepare for high levels of demand at the UK border.”

I was somewhat surprised by this, because I rather assumed that was the sort of thing Ministers would do routinely. Nevertheless, it is promised. Has this border group actually had any outcome?

Point 6 says:

“We have worked with the major airlines and airports to get weekly updates and assurances to government that they can run their schedule of summer flights.”

Have the airlines met that demand? Are the Government getting weekly updates? What picture do those weekly updates present? Is the information that is submitted published in any public domain material?

Point 7 says:

“We are working with international partners, neighbouring countries and EUROCONTROL, to ensure that disruption is minimised through coordinated planning and cooperation across airspace boundaries.”

My recollection is that that is what these organisations do all the time. I find it difficult to see how that will have any impact.

Point 8 refers to a discussion of the ground handling market.

Although we will not oppose the instrument, on the grounds that we want the Government to bring forward a wider message for the efficient use of new slots, I hope the Minister can use this debate as an opportunity to bring forward a real strategy to solve this crisis.

I am grateful to all noble Lords for their contributions to today’s debate. I hope to get through as many of the questions as I possibly can. I think I can do them all, but if not, as ever, I will pop a letter in the post and try to provide a bit more information.

My noble friend Lady McIntosh of Pickering raised the airport tax with me beforehand and we discussed it. The airline knows when someone books a ticket, so it knows that it has people who are about to fly, but many people book tickets many months ahead. I suppose that the airline thinks that it will be able to meet those obligations many months ahead, and then it turns out that it cannot. That is where short-notice cancellations come in. We know that there is a significant amount of data in the sector; obviously a lot of it is commercially sensitive, but we are fortunate in that it is shared with the department in certain circumstances so that we can scrutinise what is going on.

I was interested in my noble friend’s intervention about ground handling and operations. That was one of the things we pointed out specifically in our letter to the industry with the CAA, which we sent at the beginning of June. We were absolutely clear with the sector that we need a realistic schedule. This is one of the things that today’s regulations will help to provide. People need certainty.

The second point that we put in that letter was that we wanted all airports to have airport partner working groups. This was particularly to address the issue that my noble friend identified: to make sure that airports are not caught short by a lack of staff in ground- handling operations that they did not know about. We asked them to do that; we also asked them to focus, again, on passengers with reduced mobility, as there have been some dreadful stories of people being left on aircraft. But in all that, there should be no compromise on safety and security. Of course, we also said that all passengers must be informed of their rights and compensated where appropriate.

I am probably going to say this quite a few times this afternoon, but this is a private sector. The Government are not going to go in and start requiring that sector to do certain things because it looks like a good idea right now. We are doing as much as we possibly can. However, it is a private sector and we expect the private sector to sort itself out. If we can help, we will, which is what the 22-point plan is about and where we can remind the sector of things it should be doing—for example, the airport partner working groups—then we are very happy to do so.

In that vein, the noble Baroness, Lady Randerson, mentioned training and security clearance. There are two facets to this. The first is that background checks are required, which the industry does. You have to be able to prove five years of your employment history to work in the sector and we enabled the use of HMRC employment history letters, which are helpful in that regard. The second thing we said on the industry background checks, because it can obviously sometimes take time to confirm someone’s employment, is that training can start during that period; previously, I think we were prevented by EU law from training starting while background checks were ongoing. We recognised that training could start—obviously, certain elements of it would not have been able to start, but at least the basic elements could.

There is a second lot of checks, which are those done by Her Majesty’s Government. Those include UK security and vetting, where there is no backlog and all applicants are being turned around in a few days, so that is not an issue. We have done what we can; the airports and airlines have not also stepped up and been able to recruit the people, given that there are no other barriers than them essentially being able to attract the right people, pay them the right amounts and give them the right terms and conditions. Clearly, that is something they will have to look at but, again, it is not for government to get involved in that. If the sector decides it wants to shoot itself in the foot by not providing a good service then it will, and others might then enter the sector and provide a better service. We shall see how that pans out.

My noble friend Lady McIntosh of Pickering and the noble Baroness, Lady Randerson, mentioned Heathrow. One of the journalists—I think it was Mr Calder—that the noble Baroness mentioned said that airlines were still selling tickets in that period. Yes, if the cap had not been reached there was no rationale for people not to sell them then. But on the more general situation at Heathrow, it is clearly a very important airport and has its own relationships with its airlines. I have seen the back and forth with Emirates and I should imagine that Emirates is extremely irritated. Heathrow will have to manage its relationship with Emirates, and all the airlines, because other airports are available.

At the end of the day, there are other options and an airline that felt particularly aggrieved might decide to take another option. Again, we are not going to get involved in that. We have no lever with which to get involved to shape how Heathrow Airport manages its business. It has decided to act as it does, which it is within its right to do as the owner of the airport. You cannot just turn up; you have to have a booking. It will be interesting to see how that develops.

Obviously, we all want to see everything go back to normal and our hugely successful aviation sector get back on its feet, but this is not unique. My noble friend talked about half term. I think she said 2% to 3% of UK flights were cancelled; it was 11% in the Netherlands. This is not unique to the UK. However, I reiterate what my noble friend said: I too travelled at that time and had no trouble at all. Not all airlines, airports or times of day are affected. We should therefore make sure that people do not get overly concerned or anxious about the situation.

On short-notice cancellations, there are usually emails and texts—the normal ways one communicates with airlines. I thank both noble Baronesses for raising the 14-day period. We originally proposed seven days, but following the consultation that was increased to 14. That is beneficial for all concerned in terms of planning, and it benefits consumers. If a flight is cancelled within 14 days, the airline loses its right to alleviate that slot, so this is quite a useful lever.

I know it does not feel like it, but there is still reduced demand for aviation globally. The shortage of staff globally—this affects the States as well—is putting a dampener on demand, but some people are still choosing not to travel. The Government are trying not to suppress demand but to manage supply. Our number one concern is getting a schedule that is deliverable. By putting this regulation in place, we will improve the deliverability of the schedule and of whatever supply is out there. I very much hope that all the demand can find an appropriate flight, but I do not know whether that is the case as we have not seen exactly what will happen.

The noble Lord, Lord Tunnicliffe, talked about the Government’s plan for aviation. We have a very capable Aviation Minister who has been working in the sector for a number of years and there are a number of strategic documents out there that set out very clearly what the Government are looking for, such as Flightpath to the Future. We have done all sorts of consultations recently on consumer policy reform. We are also working very hard on the longer-term skills element of this, in terms of how we encourage people into the aviation sector. My honourable friend the Aviation Minister is at the heart of these 22 measures. Although the noble Lord, Lord Tunnicliffe, is disappointed that the Secretary of State has not met somebody this summer, I assure him that the Aviation Minister is all over this and has been since the beginning of the year. We have been working on this for months. Obviously, these regulations do not come from nowhere; we have been working on them for a very long time.

The noble Lord asked about some of the elements from the 22-point plan. Point 3 refers to the strategic risk group. It is an important group and yes, very senior attendees from the aviation sector turn up. He reckoned that it could have met at least twice. I assure him that it has met five times and will continue to meet during the summer. I will write to him if I can get any more information about the outputs from those meetings; I suspect a lot of the information will be commercially sensitive, but it may not be and I may be able to provide a bit more input. The operational directors do turn up to the summer resilience group referred to in point 4. That group has met seven times to date and will continue to meet over the summer.

The joint Home Office and DfT ministerial border group would not normally meet if there were no problems at the borders—I do not like having meetings unless something is wrong—and our borders normally function incredibly well. The four meetings that have happened this year so far have been used to scrutinise plans and make sure that everything is appropriate.

On point 6, I can confirm that we get data from the major airlines and the airports weekly. Obviously, much of it is commercially sensitive and therefore is not published.

I reassure the noble Lord, Lord Tunnicliffe, and other noble Lords that the Government take this really seriously. We have tried to intervene wherever we can but, at the end of the day, this is a private sector and we will leave it to the private sector to sort this out. We want our aviation sector to be back to its greatness as soon as possible. This regulation is a small step to help the system to stabilise and then, hopefully, to grow.

Motion agreed.