Flybmi

Baroness Randerson Excerpts

Monday 18th February 2019 Lords Chamber

[Baroness Sugg]

I thank the noble Lord for his questions. On how we are dealing with airline insolvency in the future, we have commissioned an independent review led by Peter Bucks to review consumer protection in the event of an airline or travel company failure. It is looking at options including an orderly wind-down of an airline so that it is able to conduct and finance repatriation options without impact on the taxpayer. The review is also looking at the lessons learned from the collapse of Monarch, and will identify potential market reforms necessary to ensure that passengers are protected when an airline fails. This is a complex issue and it is an extensive report. We are expecting the report in the spring.

Initial estimates are that fewer than 1,000 affected UK-originating passengers are overseas. Many will have already made their way back; many will have been planning to stay abroad. We understand that about two-thirds of those booked to return were on code shares, and those bookings will be honoured.

On the PSO, the department and the CAA were not informed of the administration until very shortly before the directors agreed to it. To be clear, the contract for the PSO is directly with the city of Derry and Strabane council. They are the people who run that contract and it is they who will re-let it shortly.

[Baroness Randerson (LD)]

My Lords, I thank the Minister for her Statement. The company cited Brexit as one of the reasons for its problems. First, the fall in the value of the pound in the past two and a half years has obviously meant that people are finding it more difficult to afford holidays abroad. It mentioned the spike in fuel and carbon costs caused by our exclusion from full participation in the EU Emissions Trading Scheme—we have been suspended from that until the withdrawal agreement is in place. The company said that it was unable to secure valuable flying contracts in the EU because of Brexit uncertainty.

On Saturday, we had Flybmi; today, we have the very sad news about Honda in Swindon. The trickle of job losses has become a steady flow. Today as well, we have the UK Trade Policy Observatory estimating some 750,000 job losses—that is a conservative estimated—as a result of Brexit uncertainty. What plans do the Government have to retrain people who lose their job because of Brexit uncertainty? What plans do they have to find new jobs for them? Have they estimated the total cost to our economy of retraining people and providing them with benefits while they are unemployed?

[Baroness Sugg]

Both the UK and the EU have made it very clear that we want flights to continue after Brexit. We and the EU are taking the necessary actions to ensure that this will be the case in the event of no deal. This sad event is a commercial matter for the airline in a competitive industry. BMI has been exposed to wider pressures faced by the global aviation industry such as increasing fuel prices and intense competition. Other EU airlines have collapsed in recent years; for example, Germania, Primera Air, Air Berlin and flyvlm. This is not just a UK issue. I agree with the noble Baroness that businesses want certainty. I am afraid that that I do not have any figures on jobs and retraining, but I regularly hear requests for certainty from the aviation industry. That is why we are working to deliver a deal and the implementation period that comes with it. I hope that that will be agreed soon so that we can give businesses the certainty they need.