Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2020

Baroness Kennedy of Cradley Excerpts

Thursday 18th June 2020 Lords Chamber

[Baroness Kennedy of Cradley (Lab) [V]]

My Lords, this statutory instrument is technical. It makes sure that the Government can ensure that the correct insurance requirements are in place for air carriers and aircraft operators at the end of the transition period. However, as has been noted by my noble friend Lord Foulkes, the deadline for the end of the transition process is fast approaching. With aviation being one of the most heavily regulated industries, there will be a number of SIs in this policy area for Parliament to agree by the end of the year. They must all be done in time for the CAA to prepare and to give airlines the certainty they need after this period of significant upheaval.

Given the understandable delays due to Covid-19, and the limits on Parliament due to social distancing, is the Minister confident that there will be time for proper parliamentary scrutiny, and agreement, of all of the SIs that will be needed to ensure the smooth running of our aviation industry?

I turn now to the issue of aviation insurance. Covid-19 has hit the aviation industry very hard. Hundreds of aeroplanes have been left grounded. Social distancing measures and quarantines, along with low consumer confidence, are creating considerable uncertainty about what air travel there will be in the coming months. Yet I understand that commercial aviation operators have not typically purchased business interruption coverage, nor has it been widely available in the industry. That is why, as we have heard in the debate, discussions about insurance, and in particular business interruption insurance against pandemics, is now a hot topic.

There is interest in exploring insurance solutions to manage the potential impact of future pandemics and other costly disruptions, such as volcanic eruptions and extreme weather. The insurance sector has the capacity to create solutions for these risks. That will take time and will require a high level of commitment and collaboration between airlines, consumer groups, risk advisers and insurance representatives. However, as the world becomes increasingly interconnected, and risk becomes more global and complex, surely now is the time to address this issue by finding a creative solution that can protect passengers and airlines alike. Do the Government have plans to facilitate discussions in order to secure a system that protects airlines and passengers as regards insurance? If so, what conversations have they had with airlines and insurers about a new pandemic-based co-insurance agreement?

Finally, as we begin to look forward to air travel once more, what plans do the Government have to review protections for consumers following the experience of passengers during this pandemic regarding both refund policies and being able to fly safely?