Airports Slot Allocation (Alleviation of Usage Requirements) (No. 2) Regulations 2023

Baroness Randerson Excerpts

Tuesday 19th September 2023 Grand Committee

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

My Lords, these draft regulations were laid before Parliament on 18 July, and noble Lords will recall that similar regulations have been debated previously on a number of occasions. The regulations seek to ensure minimal customer disruption as the aviation sector recovers from the pandemic. The regulations 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 minimise disruption to consumers and best support the recovery of the aviation sector.

Ordinarily, airlines must operate their airport 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. As a result of the impact of Covid-19 on air travel demand, alleviation from current slots rules has been provided since summer 2020.

The department has seen a strong recovery in passenger demand during 2023, but there remains continued uncertainty and lack of resilience in the industry, and demand on some routes remains below the levels seen before the pandemic. These factors are affecting both demand, in terms of returning passengers, as well as supply-side factors, such as aircraft availability and staffing. These are adding to a “long Covid tail” in rebuilding resilience in the sector.

Aircraft that were out of service during the pandemic are spending much longer in maintenance and overhaul than would normally be the case. This is compounded by difficulties stemming from the pandemic in the wider supply chain affecting access to spare parts across the global supply chain. This is having a long-term impact on the resilience of the sector that is attributable to the pandemic. Although the industry has taken steps to address these challenges, they are expected to remain an issue during 2024.

The Government have therefore designed a package of measures for the winter 2023 season that sees the normal 80:20 rule on slots usage stay. However, it is combined with some limited flexibility through a small pre-season hand-back allowance and a continuation of the previously adopted justified non-utilisation of slots measures.

When the pandemic initially struck, the 80:20 rule was fully waived to avoid environmentally damaging and financially costly flights with few or no passengers— so called ghost flights. The Government then offered generous alleviation while travel restrictions remained and demand was uncertain. The Government re-established the normal 80:20 usage ratio for summer 2023 and this will continue for winter 2023.

As required by ATMUA, the Government have determined that there is a continued reduction in demand, which is likely to persist, and consider that further but limited alleviation measures are justified for the winter 2023 season; this runs from 29 October 2023 to 30 March 2024. This package was developed following consultation with the industry and, of course, careful consideration of its responses.

The instrument being considered today applies to England, Scotland and Wales. Aerodromes are a devolved matter in Northern Ireland. As there are currently no slot co-ordinated airports in Northern Ireland, the Northern Ireland Executive agreed that it was not necessary for the powers in the Act to extend to, or apply in relation to, Northern Ireland.

In this instrument, the Government have focused measures on a return to business as usual. The Government are mindful of the need to balance supporting the sector through sensible and proportionate measures to aid its recovery—and, indeed, to protect consumers from disruption—with offering excessive alleviation, which would potentially distort competition.

There are two key provisions. The enhanced justified non-utilisation of slots provisions were first introduced for winter 2022. These act as a safety net for airlines if new restrictions are introduced and they can justify not using those slots. The second provision is a limited slots hand-back. For this winter season, the Government will allow carriers to claim alleviation on up to 5% of their slots at any airport, handed back before the start of the season.

The Government have offered this opportunity in the expectation that industry will deliver a realistic schedule for winter 2023, thereby minimising last-minute cancellations and delays. These measures will cover the winter 2023 season only. My department is considering whether further alleviation is likely to be justified for future seasons. I beg to move.

[Baroness Randerson (LD)]

My Lords, I thank the Minister for her explanation. It is a pity that these regulations are now up against such a tight timescale for their introduction. That is, of course, due to delays. The Secondary Legislation Scrutiny Committee—from which the noble Baroness, Lady Ritchie, and I have just run to be here this afternoon—gave adverse reports on the previous presentation of the regulations, not for what they contained in respect of legislation but because they failed to explain it fully. There was a poor Explanatory Memorandum, especially in relation to the consultation responses and the policy background. As this now stands, it gives a clear explanation of a very complex policy; it is a situation with many factors at play.