Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2023

(Limited Text - Ministerial Extracts only)

Monday 6th March 2023 Grand Committee

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2023.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, these draft regulations were laid before Parliament on 31 January and will be made under powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021, also known as ATMUA. Following the UK’s departure from the European Union, this legislation created a more flexible set of powers for Ministers to implement alleviation measures for airport slots related to the impacts of Covid-19, subject to a vote in both Houses. This allows the UK to adapt its approach to best support the recovery of the aviation sector.

Ordinarily, airlines must operate their slots 80% of the time to retain the right to those same slots the following year. This is known as the 80:20 or “Use it or lose it” rule. This encourages efficient use of scarce airport capacity. We have been amending the airport slots requirements since the summer of 2020; we have seen a promising recovery in passenger demand during 2022 and in the early part of 2023, but there remains some continued uncertainty in the industry and demand remains below the levels seen before the pandemic. The Government have therefore designed a package of measures for the summer 2023 season that sees a return to the normal 80:20 rule on slots usage. This will encourage more efficient use of slots, combined with flexibility to help manage that remaining uncertainty.

When the pandemic originally struck, the 80:20 rule was fully waived. This avoided environmentally damaging and financially costly ghost flights. We then made fairly generous alleviations for the four subsequent seasons, while travel restrictions remained. Last summer, in 2022, we changed the usage ratio to 70:30 because we felt there was a more positive outlook in demand and wanted to ensure that the slots were used as effectively as possible.

However, as noble Lords will recall, there was some disruption during the summer season last year and we made an additional alleviation, a one-off slots amnesty, which helped to calm the disruption and meant that the aviation sector was flying the schedule that it said it would. That very much helped to reduce last-minute cancellations, which ended up being around the 2019 levels.

For summer 2023, the season that starts on 26 March and runs to 28 October, we are planning to return to the pre-pandemic 80:20 allocation—there has been no change in that. We will continue to include the enhanced justified non-use provisions, which we introduced for winter 2022, for those areas where there is still considerably reduced demand. That might be because of pre-departure testing, flight bans, quarantine or self-isolation requirements, all of which put a significant dampener on demand. It is in those circumstances that the justified non-use provisions come into play. Following consultation with the industry—that is, airlines and airports—we have decided to include an alleviation of a 5% slot hand-back, but this must happen before the start of the season so that there is no uncertainty going into it about whether a route will be operated on a day or at any particular time.

It is worth noting that the instrument applies to England, Scotland and Wales. This is because aerodromes are a devolved matter in relation to Northern Ireland. In any event, there are no slot co-ordinated airports in Northern Ireland.

I have had many conversations with the aviation sector and we are very focused on ensuring that summer 2023 is a success. I believe that the provisions within this statutory instrument will contribute greatly to that. However, we also recognise that the sector has nearly recovered and the alleviations we are proposing are therefore limited in nature. I beg to move.

[Lord Bassam of Brighton (Lab)]

My Lords, I am grateful to the Minister for introducing this. She will be appreciative that I am not my noble friend Lord Tunnicliffe. She looked slightly puzzled earlier that he was not here. I can only say that he is on important duties elsewhere. I have gone through the material and, as my colleagues in the Commons were keen to say, there is not a big policy difference between us; we are quite happy with the measures that the Minister has set out. I will just make a few points.

Obviously, it is vital for our economy that the aviation sector recovers fully to its pre-Covid levels. My understanding is that we are likely to come back to this issue again in the autumn when the summer season will have been reviewed and we will have to decide whether we need to offer some further form of alleviation.

I have looked a little at the data on the strength and pace of the recovery, and my understanding is that aviation in 2022 was at 83% of 2019 levels. It would be good if the Minister could provide us with a bit more of an update on monitoring since those stats were produced and offer us a bit more on how the sector is recovering generally. I live in Brighton, not a great distance from Gatwick, which is a very important part of our economy. I am sure the Minister will be familiar with that from her time spent—usefully or otherwise—knocking on doors in the Brighton Pavilion constituency. I am sure that she will have come across a few people from the aviation sector during that time.

What financial assistance is currently being made available to airlines to support their recovery, and what more can the Government do to underline that? Although I guess the information is less important for Heathrow and Gatwick, is targeted support being offered to regional airports? I note the closure of Doncaster Airport, which is very unfortunate. The strength of our industry is very reliant on its regional recovery as well. With that, I restate my support in general terms for the policy objectives adopted and ask the Minister whether she could cover those points—in particular, whether we are going to be here again in six months’ time.

[Baroness Vere of Norbiton (Con)]

I am grateful to the noble Lord, Lord Bassam, for standing in for the noble Lord, Lord Tunnicliffe. I bumped into him earlier; all I will say is that he looked very dapper, so I am sure he is going somewhere important.

I am very happy to go through the questions raised by the noble Lord. Will we be back here in autumn? I do not know; quite possibly. You have the summer season and the winter season. The winter season will start towards the end of October, and it will very much depend on the outcome of the consultation. We tend to try to do the consultation with industry as late as possible before the next season starts, but we need certainty, so we need to do it before the season starts. We will consult with industry again. It will depend on how the summer has gone and how things are looking from a Covid perspective for the winter but, as I think I said the last time I was standing here, at the moment, alleviations are moving in one direction, and I do not particularly want to continue them forever. It is right that we get back to the normal slots regime at some stage because it is important for the efficient use of capacity. We will monitor that carefully and speak to the industry in due course.