Airports: Heathrow

Earl Attlee Excerpts

Tuesday 15th November 2011 Lords Chamber

[Lord Glentoran]

To ask Her Majesty’s Government, in the light of the possible sale of British Midland International, what they are doing to protect Heathrow landing slots for flights to and from Northern Ireland.

[Earl Attlee]

My Lords, the allocation of take-off and landing slots at Heathrow is governed by EU law. We recognise the economic importance of air services from the devolved Administrations to Heathrow. However, airlines face competitive pressure to use their slots for the most commercially viable routes. Ultimately, decisions about which air services operate between UK airports are commercial ones for airlines to determine.

[Lord Glentoran]

My Lords, I thank the Minister for his reply. The background to this Question is that BMI is being sold. It is vital for the Northern Ireland economy to have a regular professional service from Heathrow to Belfast. Does not the Minister agree that the fortunes of a part of the United Kingdom should not be in the hands of an airline or its executives? What will Her Majesty’s Government do to ensure that Northern Ireland is not deprived of Heathrow landing slots, which are vital for badly needed inward investment into the Province?

[Earl Attlee]

My Lords, the proposals for the sale of BMI are a commercial matter for its owner, Lufthansa. There is no indication that there will be any changes to the current level of BMI services from Belfast City Airport to London Heathrow. A number of other airlines also operate services between Northern Ireland’s airports and London airports. Existing services also operate from Belfast International Airport to hub airports in northern Europe.

[Lord Kilclooney]

My Lords, does the Minister recall that there used to be two airlines flying from Belfast to Heathrow—British Airways and British Midland? However, British Airways withdrew that service and allocated the slots elsewhere. If it now takes over British Midland, will the Government do nothing to stop British Airways withdrawing those slots from the Belfast flight?

[Earl Attlee]

My Lords, at the moment we do not see a problem. However, it would be open to the Northern Ireland Assembly to apply to the Secretary of State for Transport to impose a public service obligation on an air route from Northern Ireland to London, should the Assembly feel that a case can be made which satisfies the EU regulations on PSOs. If approved, this would permit slots to be ring-fenced at a London airport. However, there is no other mechanism for the Government to intervene in the allocation of slots at Heathrow or other London airports. We do not see the need at the moment to impose a public service obligation.

[Lord Kinnock]

Does the Minister recognise that it is important to sustain the Heathrow slots for Northern Ireland simply because Heathrow is the most substantial hub? In the case of sustaining the economic interests of Northern Ireland, it is important that there is an absolutely dependable service from that hub into the Province. That is in the interests of the whole of the United Kingdom. Therefore, will the Minister maximise the use of public service obligations to ensure that when Lufthansa disposes of British Midland the slots will not disappear into a black hole as well?

--- Later in debate ---

[Earl Attlee]

The noble Lord is quite right in his initial analysis, with which I agree. However, at the moment we do not see a problem, and for that reason we would be unable to impose a public service obligation.

[Lord Alderdice]

My Lords, my noble friend may not see a problem, but will he take it from me that those of us from Northern Ireland who are users of the service do share the anxieties raised by the noble Lord about British Airways’ previous treatment of Northern Ireland? This is not just a question of the economy of a company but the economy of a part of the United Kingdom. Having slots to other airports is simply not an adequate replacement. Economy flexible flights with British Midland now cost well in excess of £500 return. It is clear that it is making a profit. Therefore, it does not seem reasonable to assume other than that the Government should take some responsibility and assist the Northern Ireland Assembly rather than simply leave this matter to the Assembly to deal with on its own.

[Earl Attlee]

My Lords, I hear what my noble friend says. There is a further difficulty with the public service obligation, which is that one can be imposed only if there is a difficulty with services to London as a whole, as a region. If there is a problem with services to London as a hub airport, that would not justify imposing a public service obligation, so at the moment it is difficult to have the effect that the noble Lord seeks.

[Lord Davies of Oldham]

My Lords, the House should have taken solace from the fact that the Minister has added to his very negative response in his first Answer by indicating that the Government can act if it proves to be necessary. Will he recognise that of course the interests of Northern Ireland are very much involved in this issue, but that it is not just Northern Ireland and Belfast? Edinburgh, too, has its anxieties about this situation. Is he aware that Willie Walsh, the egregious head of IAG, in welcoming the potential opportunities from this purchase, stated that in fact the great business opportunities, of course, lay with using these slots for long-haul aircraft, not for serving parts of the United Kingdom?

[Earl Attlee]

My Lords, I can definitely feel the heat from your Lordships. The sale of these slots to BA will increase the share of BA’s parent, IAG, of all Heathrow airport slots from 44 per cent to around 53 per cent, although IAG points out that even after the acquisition of BMI’s slots, its percentage of Heathrow slots would still be smaller than Lufthansa’s 60 per cent slot holding at Frankfurt.

[Lord Forsyth of Drumlean]

Will my noble friend give an undertaking to look at this issue more carefully? The noble Lord is perfectly correct that this is an issue not just for Northern Ireland but for Scotland, where the flights from Glasgow and Edinburgh have been greatly reduced, the fares are very substantial and it is undoubtedly the case that British Airways would use these slots for more lucrative transatlantic flights. It is no good looking at London as a whole. The point is that Heathrow is the hub from which it is possible to do business internationally.

--- Later in debate ---

[Earl Attlee]

My Lords, commercial aviation is a global business. This is reflected in the fact that airport slots in EC countries are managed within regulations that follow the worldwide slot guidelines determined by IATA. The EU slot regulations seek to ensure that non-discriminatory and transparent procedures for slot allocation exist across member states.