Commercial Air Routes: United Kingdom and East Africa

Baroness Sugg Excerpts

Wednesday 13th February 2019 Lords Chamber

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

My Lords, UK airport slot allocation is based on worldwide guidelines from the International Air Transport Association—IATA. These guidelines provide for slots to be allocated independently of government in a non-discriminatory way. The Government recognise the difficulty of obtaining slots at highly constrained UK airports, and the much-needed additional capacity from Heathrow expansion will ease that constraint, enabling us to maintain and develop long-haul connectivity, including to developing economies such as Rwanda and Uganda.

[Lord Popat (Con)]

I thank the Minister for that helpful response. Almost two years ago, I helped RwandAir launch direct flights between London and Kigali, but I found that securing convenient landing and departures slots was practically impossible at Gatwick or Heathrow. The problem is that the biggest airlines, including budget airlines, have a monopoly over peak-time slots through grandfathering rights, meaning that newer airlines are squeezed out. Does the Minister agree that, given our country’s need to build commercial bridges with Africa post Brexit, we need a better and fairer system to ensure adequate access to those markets? Will she assure us that the Government will look urgently into reforming the allocation system?

[Baroness Sugg]

My Lords, I thank my noble friend for his continued efforts as a trade envoy to Rwanda and Uganda and particularly for his support for UK businesses involved in building Kigali airport. The Government believe that there is a case for changes in slot allocation where there is significant new capacity. Our aviation strategy, Aviation 2050, consults on a wide range of policy proposals designed to increase competition and connectivity both domestically and abroad. That includes looking at existing slot regulations to see how we can promote competition and ensure new long-haul routes, such as those to east Africa, can be delivered.

[Viscount Waverley (CB)]

My Lords, while I agree with the sentiment behind the Question asked by the noble Lord, Lord Popat, would the Minister nevertheless concur that encouraging intraregional trade is essential for multiple reasons and that encouraging an east-west network of air routes should be made a practical reality?

[Baroness Sugg]

I think I agree with what the noble Viscount says. The purpose of our slot reform would be to increase competition and benefit the consumer.

[Baroness Randerson (LD)]

My Lords, BA has in the region of 380 slots at Heathrow and Virgin has 27. Under the current system of slot allocation, every time new slots become available, they are allocated on the basis of the current ratio. This means that it is impossible to challenge BA’s position. This is not real competition and it is not good for consumers, who are offered no real choice. Will the Minister commit to look specifically at this aspect of slot allocation?

--- Later in debate ---

[Baroness Sugg]

Yes, we will. The current slot regime allows for new entrants. The regulations require 50% of available slots to be given to new entrants. The main issue is that there are not very many slots available. This is why we need expansion. There will be more slots available with expansion and with other airports making better use of their existing capacity. Our aim in looking at the slot allocation regime is to ensure competition, which will ultimately benefit the consumer.

[Lord Rosser (Lab)]

My Lords, government Ministers talk in enthusiastic terms about the new trade agreements that we will be able to conclude with other countries following Brexit. Will the availability at our major airport of sufficient and appropriate airline slots for direct services to those other countries be an important consideration in successfully concluding such trade deals? If so, do the Government intend to make sure—as opposed to simply talking about it—that such slots are available at Heathrow, or Gatwick at least, in the immediate aftermath of Brexit when, as I understand it, these new trade agreements with other countries will be concluded with considerable rapidity?

[Baroness Sugg]

My Lords, we aim to increase our connectivity across the globe. We have a very experienced team of air services negotiators in our department who work across the world to deliver new air services agreements. Our current approach is to favour as much liberalisation as possible, providing it is in the UK’s national interest. Regardless of the negotiations, Brexit will not deliver new slots, but an increased capacity at Heathrow will do. That will help us increase our links, and increase our trade links, across the world.

[Baroness Nicholson of Winterbourne (Con)]

My Lords, given the Middle East’s enormous appetite for access to the British market, would the Minister reconsider the prohibition on direct flights from Iraq to the United Kingdom and lift the prohibition on Iraqi pilots? Sadly, at the moment, they must be substituted by Jordanian pilots, who are doubtless wonderful but are none the less not the national product.

[Baroness Sugg]

My Lords, all of our decisions are based on our priorities of safety and security. We regularly look at our current system and will update it regularly.

[Lord Tomlinson (Lab)]

My Lords, can the Minister suggest to her right honourable friend the Secretary of State for Transport that he might suggest creating mythical new slots for mythical airlines without planes?

[Baroness Sugg]

My Lords, I was considering how noble Lords might be able to ask a question like that when we were talking about east African slots, but I had not considered that angle. We are interested in delivering real slots for real flights to new countries.

[Lord Polak (Con)]

My Lords, it is not just about the slots but what sort of slots are made available to these new airlines. They are often at the worst times of day. British Airways does not fly directly to Rwanda, and RwandAir plugged the gap by flying to the UK three times a day, I think—or a week. The problem is planning, because when the slots are given, they are given for only six months at a time. What sort of business can plan for six months only? Can the Minister go back and give these slots for longer?

[Baroness Sugg]

My Lords, my noble friend is quite right to point out that there are no direct BA flights to these countries. It does operate direct flights to Kenya and across the continent. In 2017, there were over 23,000 direct flights to Africa, carrying over 4.5 million passengers. My noble friend is quite right: the timing of the allocation of these slots is absolutely key. As with all businesses, airlines need to plan ahead. We are looking at that through our slot reform policy consultation.

[Lord Haselhurst (Con)]

My Lords, if there is increasing demand for passengers and freight to be taken to east African countries, notably Rwanda, the airlines themselves might realise that there is some advantage in changing their flight schedules. The Government’s interest might be not only in that but in the fact that Rwanda is to host the next Commonwealth Heads of Government Meeting, and it will be somewhat embarrassing if we do not have direct service by then. Does my noble friend agree?

[Baroness Sugg]

As my noble friend will be aware, decisions around where airlines fly are down to commercial reasons. However, I agree with him that it is important that we promote ties with Rwanda, not least as it is following us in hosting the next CHOGM summit. Trade in goods and services between the UK and Rwanda increased by 50% last year, outstripping growth in east Africa and indeed the continent as a whole. We want to see that growth in trade continue.