Draft Airports Slot Allocation (Alleviation of Usage Requirements) (No. 3) Regulations 2022

(Limited Text - Ministerial Extracts only)

Monday 24th October 2022 General Committees

[The Minister of State, Department for Transport (Lucy Frazer)]

I beg to move,

That the Committee has considered the draft Airports Slot Allocation (Alleviation of Usage Requirements) (No. 3) Regulations 2022.

It is a pleasure to serve under your chairmanship, Mr Robertson. The draft regulations will be made under powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021. Following our departure from the EU, that legislation created a more flexible set of powers for Ministers to implement alleviation measures related to the impacts of covid, subject to a vote in both Houses, allowing us to adapt our support to better support the recovery of the aviation sector.

Ordinarily, airlines must operate their airport slots 80% of the time to retain the right to those same slots the following year. It is known as the 80:20 rule, or the “use it or lose it” rule, and it encourages the efficient use of scarce airport capacity. This summer, we saw a promising recovery in passenger demand. It is has been welcome that so many of us have again been able to visit family and friends, or to travel abroad for a much deserved break. However, demand remains below pre-covid levels and the recovery has not been without challenges. We know that the sector struggled to ramp up operations and there was widespread disruption at airports in the early summer, so we have designed a package of measures for the winter season that aims to balance the recovery of the sector with the enabling of airlines to plan deliverable schedules.

Let me go through the background. When the pandemic struck, initially the 80:20 rule was fully waived to avoid environmentally damaging and financially costly flights with few or no passengers. We then offered generous alleviation for four seasons, while travel restrictions remained and demand was still uncertain. Last summer, we implemented a 70% usage ratio, reflecting the more positive outlook in demand. We have provided additional alleviation during this season in response to the high levels of disruption at airports arising from the continuing impact of covid.

We have determined that there is a continued reduction in demand that is likely to persist and we consider that further alleviation measures are justified for winter 2022, which runs from 30 October 2022 to 25 March 2023, so on 20 July we published this draft statutory instrument, setting out the package of measures that we propose. The package was fully developed following consultation with industry and the careful consideration of the responses. The draft instrument applies to England, Scotland and Wales. Aerodromes are a devolved matter in Northern Ireland and, as there are currently no slot-co-ordinated airports in Northern Ireland, the Northern Ireland Executive agreed that it was not necessary for the powers in the Act to extend to or apply in Northern Ireland.

We focused measures in the draft instrument on encouraging the ongoing recovery in flight traffic while protecting connectivity to destinations where restrictions remain in place, and on minimising the risk of disruption at airports while the sector recovers. That includes retaining the 70:30 usage requirement, meaning that airlines are required to use their slots at least 70% of the time to retain the right to operate the same slots the following year.

The regulations include a justified non-use provision, which provides alleviation for airlines flying in restricted markets. For this winter, we have expanded the list of covid-19 restrictions that airlines may use to justify not using their slots if they severely reduce demand for the route, or its viability, to include pre-departure testing requirements. The restrictions covered also include flight bans and quarantine or self-isolation requirements applied at either end of the route. As was the position in summer 2020, that will apply whether or not restrictions could reasonably have been foreseen, to ensure that we are protecting carriers in markets with long-term restrictions in place.

There will be a three-week recovery period during which justified non-use may still apply following the end of restrictions. We will also allow early applications for justified non-use. By that I mean that when an official Government announcement about the duration of covid-19 restrictions gives rise to a reasonable expectation that they will still be in place on the date of the operation of the slots, the carrier will be able to apply for justified non-use at that point, rather than having to reapply every three weeks. That will allow the earlier handing back of slots so that other carriers can effectively use them, as well as remove some of the administrative burdens on airlines.

In the winter of 2021, we allowed “full series handback”, whereby an airline could retain rights to slots for the following year if it returned the series to the slot co-ordinator before the season’s start. For this winter season, we have included a more limited measure that allows carriers to claim alleviation on up to 10% of their slots at any airport if they return them to the slot co-ordinator for reallocation before the season’s start. That should encourage carriers to plan their schedules in advance and give passengers more certainty.

The measures will cover the winter 2022 season; we are currently considering whether further alleviation is likely to be justified for summer 2023. We will consult with the industry and interested MPs to inform our policy later this year.

In conclusion, the draft instrument provides necessary relief for the aviation sector for winter 2022. Through the measures I have outlined, we have aimed to strike a balance between supporting the sector and encouraging recovery and the efficient use of slots. For those reasons, I commend the draft instrument to the Committee.

--- Later in debate ---

[Lucy Frazer]

It is always a pleasure to answer the points raised by the hon. Member for Wythenshawe and Sale East. I was pleased that he made the sensible point, with which we agree, that we do not want ghost flights, which are unnecessary both financially and in terms of the economy. The Government’s position on short-notice cancellation is that we have proactively offered carriers the flexibility to hand back up to 10% of slots at airports. On the hon. Gentleman’s point about the formula, I reassure him that the Government look at the demand forecasts available and make decisions on the basis of those forecasts.

The hon. Gentleman made an important point about modernisation. I reassure him that we are committed to modernisation, for the reasons he set out. We have a manifesto commitment in this policy area and have already provided £9.2 million to support progress and enable sponsors to complete stage 2 of the airspace change programme. Earlier in 2022, the Civil Aviation Authority and my Department, as co-sponsors, approved the second iteration of the Airspace Change Organisation Group’s UK airspace change masterplan, which was published in January and sets the direction for the airspace change programme.

I thank the hon. Gentleman for his thoughtful points. For the reasons I have set out, I commend the draft instrument to the Committee.

Question put and agreed to.