DrAFT Airports Slot Allocation (AMENDMENT) (EU EXIT) REGULATIONS 2021

Huw Merriman Excerpts

Tuesday 12th January 2021 General Committees

[Huw Merriman (Bexhill and Battle) (Con)]

My congratulations, Ms Eagle, on becoming Dame Angela. I want to use the opportunity to speak in this Committee because the Select Committee on Transport, of which I am Chair, has looked at the aviation industry and the huge difficulties it has faced arising from the pandemic. Slot allocation is one matter that we looked at with interest.

Focusing specifically on the confines of this Committee and this legislation, I support the legislative change. It is necessary to ensure that we have a smooth transition from EU to UK rule-making. I want to ask the Minister a series of questions that seek to ensure we get the balance right when we use the rules and he may well want to reflect on them and write to me.

In a situation where no passengers are flying, the financial situation with airlines is incredibly precarious and our carbon footprint is too large, it is right that it would be ludicrous to see empty flights going from one airport to another to preserve that slot allocation for an airline. “Use it or lose it” clearly makes no sense when passengers are not going to use it. On the other hand, we know that, prior to the pandemic, there were great issues with competition and new entrants to the market. I am particularly keen to ensure that the airlines cannot use the opportunity, in the event that the market bounces back, to not use their slots because they do not have to “use it or lose it”. That stops other entrants coming through to the market.

I provide the Minister with one example from some months previously. It was a tragedy at Gatwick that, at a time when the airport expected to be resuming daily flights over to New York using Virgin, instead of that occurring in May, Virgin announced it was going to move all its operations from Gatwick to Heathrow. However, Virgin did not relinquish its slots, despite making it clear it did not see itself being at Gatwick for some years to come. That gave Gatwick great cause for concern at a time when, for example, the Hungarian airline Wizz Air was looking to expand but there were no slots remaining at Gatwick. That is a good example of how the “use it or lose it” rule was helpful for competition, because it kept the airlines on their toes. If they were not going to use their slot, it would be taken away from them. With this rule set in the regulations, that does not occur. It is important that the Minister ensures the flexibility is there and that the rules are only put in place for a short period so we can assess the market and if it has returned and airlines are sitting on slots they could be using but are not because it is economically advantageous for them to use elsewhere, that they not be allowed to do so.

I have four questions for the Minister. First, to give the airlines and the airports the certainty they need as to when the powers are going to be utilised now that they will reside with the Secretary of State, when will the Minister look to utilise the new powers to determine the rule set beyond March 2021 when they expire? It is vital for the month of January that decisions can be made for the summer period. I hope the Secretary of State will look to utilise those powers this month.

Secondly, will the Government look at the new rule set devised by the International Air Transport Association, the Airport Council International and the Worldwide Airports Coordinators Group? Interestingly, those rules changed from the 80:20 split to a 50:50, therefore, fewer —but still some—flights required. There is also an additional caveat that, where there are national Government covid restrictions on the airlines, that can count towards the 50%. That strikes me as rather bureaucratic at a time when the flights clearly are not there. However, I say to the Minister that perhaps in time to come, rather than 80:20, we look at a 50:50 balancing act, which might give more flexibility and more of a nod to competition.

Thirdly, will the Government ensure that the rules balance the need to conserve money and carbon with the need to ensure airlines cannot sit on slots that other airlines could utilise in the event that the market bounces back? The example of Virgin at Gatwick is a good one as far as that is concerned. I should say to the Minister, having had conversations with his predecessor, that there was real commitment by this Government to ensure that we allow new entrants, remove the barriers and get more competition into the marketplace. It is certainly the case that BA has a dominant position at Heathrow; that cannot be healthy for competition, and the Conservative party has always stood absolutely for competition.

Finally, will the rules cover all airports, or just those within the congested airports, known as the co-ordinated airports? As the Minister stated, there is no such airport in Northern Ireland, and the rules are applicable to just a small number. I would certainly be keen for flexibility in terms of short haul versus long haul, with an expectation the latter will not bounce back as fast as the former. My main appeal to the Minister is to get the rule set used as soon as we can, ensure it is absolutely flexible so that the Government can pivot as the airline and aviation industry pivots as well, and strike a balance between not wasting carbon and money for the airlines and, at the same time, giving the airports a little more help to ensure that there is competition and business for their slot allocations.