PARLIAMENTARY DEBATE
Draft Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2023 - 28 February 2023 (Commons/General Committees)
Debate Detail
Contributions from Mike Kane, are highlighted with a yellow border.
The Committee consisted of the following Members:
Chair(s) James Gray
Members† Aldous, Peter (Waveney) (Con)
† Benn, Hilary (Leeds Central) (Lab)
† Bhatti, Saqib (Meriden) (Con)
Bradshaw, Mr Ben (Exeter) (Lab)
† Fletcher, Colleen (Coventry North East) (Lab)
† Jenkinson, Mark (Workington) (Con)
Johnson, Kim (Liverpool, Riverside) (Lab)
† Kane, Mike (Wythenshawe and Sale East) (Lab)
† Longhi, Marco (Dudley North) (Con)
† McDonald, Andy (Middlesbrough) (Lab)
† Morris, David (Morecambe and Lunesdale) (Con)
† Mullan, Dr Kieran (Crewe and Nantwich) (Con)
† Newlands, Gavin (Paisley and Renfrewshire North) (SNP)
† Norman, Jesse (Minister of State, Department for Transport)
† Shelbrooke, Alec (Elmet and Rothwell) (Con)
† Tomlinson, Justin (North Swindon) (Con)
† Young, Jacob (Redcar) (Con)
ClerksFoeke Noppert, Committee Clerk
† attended the Committee
Fourth Delegated Legislation CommitteeTuesday 28 February 2023
[James Gray in the Chair]
Chair(s) James Gray
Members† Aldous, Peter (Waveney) (Con)
† Benn, Hilary (Leeds Central) (Lab)
† Bhatti, Saqib (Meriden) (Con)
Bradshaw, Mr Ben (Exeter) (Lab)
† Fletcher, Colleen (Coventry North East) (Lab)
† Jenkinson, Mark (Workington) (Con)
Johnson, Kim (Liverpool, Riverside) (Lab)
† Kane, Mike (Wythenshawe and Sale East) (Lab)
† Longhi, Marco (Dudley North) (Con)
† McDonald, Andy (Middlesbrough) (Lab)
† Morris, David (Morecambe and Lunesdale) (Con)
† Mullan, Dr Kieran (Crewe and Nantwich) (Con)
† Newlands, Gavin (Paisley and Renfrewshire North) (SNP)
† Norman, Jesse (Minister of State, Department for Transport)
† Shelbrooke, Alec (Elmet and Rothwell) (Con)
† Tomlinson, Justin (North Swindon) (Con)
† Young, Jacob (Redcar) (Con)
ClerksFoeke Noppert, Committee Clerk
† attended the Committee
Fourth Delegated Legislation CommitteeTuesday 28 February 2023
[James Gray in the Chair]
09:25:00
Jesse Norman
The Minister of State, Department for Transport
I beg to move,
That the Committee has considered the draft Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2023.
It is a delight to serve under your chairmanship, Mr Gray. As the Committee will be aware, these regulations are extremely technical, and the instrument is merely the latest update to a set of regulations. In this case, the regulations are made under powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021. Following this country’s departure from the European Union, the legislation created a more flexible set of powers for Ministers to implement alleviation measures for airport slots related to the impact of covid-19, subject to a vote in both Houses, so that the Government are able to adapt their approach to support the recovery of the aviation sector.
In normal circumstances, airlines must operate their airport slots 80% of the time to retain the right to have those slots the following year; it is known as the 80:20 rule, or alternatively the “use it or lose it” rule, and it encourages the efficient use of scarce airport capacity. As a result of the impact of covid-19 on air travel demand, alleviation of that rule has been provided since the summer 2020 season.
The Department has seen a promising recovery in passenger demand during 2022 and the early part of 2023, but continued uncertainty remains in the industry and demand remains below the levels seen before the pandemic, which is affecting some routes more than others. The Department has therefore designed a package of measures for the summer 2023 season that sees a return to the normal 80:20 rule on slots usage to encourage efficient slot use, but combined with flexibility to help to manage the remaining uncertainty.
In this instrument, the Government have focused measures on a return to business as usual. It includes measures to protect connectivity to destinations where restrictions might be reintroduced during the season and flexibility to reduce the risk of disruption to airports, including restoring the 80:20 usage rule and adding to flexibilities as required. The measures will cover the 2023 season, and the Department is considering whether further alleviation is likely to be justified for the winter 2023 season. We will consult with industry and interested MPs to inform Government policy later this year. I commend the instrument to the Committee.
That the Committee has considered the draft Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2023.
It is a delight to serve under your chairmanship, Mr Gray. As the Committee will be aware, these regulations are extremely technical, and the instrument is merely the latest update to a set of regulations. In this case, the regulations are made under powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021. Following this country’s departure from the European Union, the legislation created a more flexible set of powers for Ministers to implement alleviation measures for airport slots related to the impact of covid-19, subject to a vote in both Houses, so that the Government are able to adapt their approach to support the recovery of the aviation sector.
In normal circumstances, airlines must operate their airport slots 80% of the time to retain the right to have those slots the following year; it is known as the 80:20 rule, or alternatively the “use it or lose it” rule, and it encourages the efficient use of scarce airport capacity. As a result of the impact of covid-19 on air travel demand, alleviation of that rule has been provided since the summer 2020 season.
The Department has seen a promising recovery in passenger demand during 2022 and the early part of 2023, but continued uncertainty remains in the industry and demand remains below the levels seen before the pandemic, which is affecting some routes more than others. The Department has therefore designed a package of measures for the summer 2023 season that sees a return to the normal 80:20 rule on slots usage to encourage efficient slot use, but combined with flexibility to help to manage the remaining uncertainty.
In this instrument, the Government have focused measures on a return to business as usual. It includes measures to protect connectivity to destinations where restrictions might be reintroduced during the season and flexibility to reduce the risk of disruption to airports, including restoring the 80:20 usage rule and adding to flexibilities as required. The measures will cover the 2023 season, and the Department is considering whether further alleviation is likely to be justified for the winter 2023 season. We will consult with industry and interested MPs to inform Government policy later this year. I commend the instrument to the Committee.
09:34:29
Mike Kane
Wythenshawe and Sale East
It is a pleasure to serve under your chairmanship, Mr Gray. We are here because maybe we have not fully left the EU, as the Minister said, after the treaty of Windsor—I am not talking about the one yesterday, but about the one in 1386, which made Portugal our oldest existing ally. As the aviation industry kept us fed and watered during the pandemic, let us hope that we can still continue to get our tomatoes after yesterday’s deal.
As an island nation, the UK’s aviation sector is a global leader, and it plays the most vital of roles in connecting us to the rest of the world, whether it be visiting our family, friends or broadening one’s horizons. We meet here to discuss the slots allocations for 2023. The time when the industry was in turmoil and the country was locked down was, without question, the most difficult time ever for commercial aviation. It is really heartening to see the sector bounce back. However, it has still not fully recovered, deeming it necessary to revisit slot allocations in advance of the start of the summer 2023 season, which is on 26 March—just four weeks away.
The season into which we are heading runs out on 28 October 2023. Am I to mark a Tuesday at the beginning of October to reconvene and discuss the same situation? I wonder who I will be facing across the Dispatch Box at that time. The “use it or lose it” rule that applies to slots means that airlines must use 80% of their slots or risk losing them altogether, as the Minister has said. Slots are hugely valuable to airlines, and sometimes it would be financially wise—yet environmentally terrible—to operate ghost flights with no or very few passengers to meet the arbitrary 80% fulfilment rule and keep the slots for future demands.
Let me give a brief history of the issue. The 80:20 rule was scrapped altogether when the pandemic struck. We have since revisited it to offer some alleviation while some travel restrictions were still in place. We also had the 70:30 requirement—again, to respond to the disruption the industry still felt. In a previous debate of this nature with one of the Minister’s predecessors back in 2021, it was believed that it would be 2023 before air traffic volumes had increased to 2019 levels.
The retained EU powers of regulation 95/93 give us the power to amend ratios as we see fit in the light of the industry’s failure to bounce back immediately, up to and including August 2024. It is also prudent for airlines to be able to hand back slots that they cannot use, because we do not want flights to take off when they do not need to so that airlines can retain rights they have had historically.
The proportion of 5% seems about right but, as I stated when I met the Minister’s predecessor back in October, the full impact assessment of the measures is not being carried out because of the short-term nature of the timescales. I hope the Minister will take on board the fact that I am still keen to see a retrospective assessment of the impact of the measures, to ensure that if and when we revisit them, we know that we are taking steps that are appropriate to the time and neither too harsh nor too weak.
As shadow aviation Minister, it pains me to think that we may be back here again in six months, in the run-up to the winter timetable, and then again for summer 2024. We should not be discussing endlessly how to support a sector in which the Government should have intervened more during the pandemic. As passenger demand is still in the recovery phase, it is more important than ever to consider ways to future-proof our airspace as we build back our world-beating capacity. Aviation will recover and grow; it must grow sustainably over the years and decades ahead. The 80:20 rule is very much part of that.
I note that although passengers are expected to benefit from the proposed relief in this legislation by retaining historic levels of connectivity, the explanatory memorandum says that there is a potential negative impact in the form of the prevention of new entrants to the marketplace. As our country tightens its collective belt because of the impact on the family purse of the cost of living crisis, it cannot be that flying and travel become solely the pursuit of the very wealthy, and we must be mindful of monopolisation. We will not oppose the regulations, but I would be grateful to hear the Minister’s thoughts on the points I have made.
As an island nation, the UK’s aviation sector is a global leader, and it plays the most vital of roles in connecting us to the rest of the world, whether it be visiting our family, friends or broadening one’s horizons. We meet here to discuss the slots allocations for 2023. The time when the industry was in turmoil and the country was locked down was, without question, the most difficult time ever for commercial aviation. It is really heartening to see the sector bounce back. However, it has still not fully recovered, deeming it necessary to revisit slot allocations in advance of the start of the summer 2023 season, which is on 26 March—just four weeks away.
The season into which we are heading runs out on 28 October 2023. Am I to mark a Tuesday at the beginning of October to reconvene and discuss the same situation? I wonder who I will be facing across the Dispatch Box at that time. The “use it or lose it” rule that applies to slots means that airlines must use 80% of their slots or risk losing them altogether, as the Minister has said. Slots are hugely valuable to airlines, and sometimes it would be financially wise—yet environmentally terrible—to operate ghost flights with no or very few passengers to meet the arbitrary 80% fulfilment rule and keep the slots for future demands.
Let me give a brief history of the issue. The 80:20 rule was scrapped altogether when the pandemic struck. We have since revisited it to offer some alleviation while some travel restrictions were still in place. We also had the 70:30 requirement—again, to respond to the disruption the industry still felt. In a previous debate of this nature with one of the Minister’s predecessors back in 2021, it was believed that it would be 2023 before air traffic volumes had increased to 2019 levels.
The retained EU powers of regulation 95/93 give us the power to amend ratios as we see fit in the light of the industry’s failure to bounce back immediately, up to and including August 2024. It is also prudent for airlines to be able to hand back slots that they cannot use, because we do not want flights to take off when they do not need to so that airlines can retain rights they have had historically.
The proportion of 5% seems about right but, as I stated when I met the Minister’s predecessor back in October, the full impact assessment of the measures is not being carried out because of the short-term nature of the timescales. I hope the Minister will take on board the fact that I am still keen to see a retrospective assessment of the impact of the measures, to ensure that if and when we revisit them, we know that we are taking steps that are appropriate to the time and neither too harsh nor too weak.
As shadow aviation Minister, it pains me to think that we may be back here again in six months, in the run-up to the winter timetable, and then again for summer 2024. We should not be discussing endlessly how to support a sector in which the Government should have intervened more during the pandemic. As passenger demand is still in the recovery phase, it is more important than ever to consider ways to future-proof our airspace as we build back our world-beating capacity. Aviation will recover and grow; it must grow sustainably over the years and decades ahead. The 80:20 rule is very much part of that.
I note that although passengers are expected to benefit from the proposed relief in this legislation by retaining historic levels of connectivity, the explanatory memorandum says that there is a potential negative impact in the form of the prevention of new entrants to the marketplace. As our country tightens its collective belt because of the impact on the family purse of the cost of living crisis, it cannot be that flying and travel become solely the pursuit of the very wealthy, and we must be mindful of monopolisation. We will not oppose the regulations, but I would be grateful to hear the Minister’s thoughts on the points I have made.
Hilary Benn
Leeds Central
I was going to ask the Minister a question, but his speech was so short that he sat down before I stood up. He will be aware that the slots formerly held by Flybe, which has gone bust, have been passed to British Airways, but a bit of an argument is going on about whether some of those slots should instead go to Loganair. Will he explain how the regulations may affect that particular set of circumstances?
09:33:15
Gavin Newlands
Paisley and Renfrewshire North
It is a pleasure to see you in the Chair, Mr Gray. Like the Labour party, we will not oppose the regulations, as we have not opposed the changes on the various other occasions when this issue has come up since the pandemic.
I do not propose to detain the Committee for long because the hon. Member for Wythenshawe and Sale East and the right hon. Member for Leeds Central raised the two points that I wanted to raise. We support the Government’s general approach to the slots issue but, like the hon. Member for Wythenshawe and Sale East, I would like to see an analysis of the impact of the measures thus far, particularly given the point made in the explanatory notes about the potential impact on new entrants to the market.
On entrants new and old to the market, the right hon. Member for Leeds Central made a good point about the Flybe slots potentially going to British Airways. Loganair is based in my constituency, so I have a vested interest in its opportunity to get some of those slots. I would like to hear the Minister respond robustly to that point, which I may take up with him after the Committee. With that, I shall sit down and let him respond.
I do not propose to detain the Committee for long because the hon. Member for Wythenshawe and Sale East and the right hon. Member for Leeds Central raised the two points that I wanted to raise. We support the Government’s general approach to the slots issue but, like the hon. Member for Wythenshawe and Sale East, I would like to see an analysis of the impact of the measures thus far, particularly given the point made in the explanatory notes about the potential impact on new entrants to the market.
On entrants new and old to the market, the right hon. Member for Leeds Central made a good point about the Flybe slots potentially going to British Airways. Loganair is based in my constituency, so I have a vested interest in its opportunity to get some of those slots. I would like to hear the Minister respond robustly to that point, which I may take up with him after the Committee. With that, I shall sit down and let him respond.
09:34:46
Jesse Norman
I thank colleagues for their comments. I was delighted that the hon. Member for Wythenshawe and Sale East brought his trademark intellectual clarity and sense of history to his remarks; that was extremely well taken. I loved the reference to our relationship with Portugal in the 14th century and I congratulate him on the amount of time he is spending with the “The Rest is History” podcast. I also thank him for supporting the Government on this instrument. He tweaks me on the issue of continuity of Ministers, but let me remind him that this is a repeat gig for me, although not necessarily on aviation; we try to make up with repetition what we may have lost in continuity.
The hon. Gentleman asked about retrospective impact, as did the hon. Member for Paisley and Renfrewshire North, and they are right to flag that concern. The hon. Member for Wythenshawe and Sale East is also right that a formal impact assessment was not prepared for the instrument because it will have effect for less than 12 months, although an explanatory memorandum has been published with it. We all wish that we could return to normal and I welcome his appetite for non-intervention. We will continue to monitor impacts as we go, but the formal provision remains as it is.
The hon. Gentleman said it was a pity that the Government could not have intervened more during the covid period, but he will recall that the flexibilities we are now exploiting are precisely because we were able to exit the EU regulations relating to this sector. There was a much more blanket response that we undertook under EU law during the period, as he will recall from having been in his role, so there is now flexibility as a result of exiting those regulations.
On the question of the former Flybe slots that arose from the takeover of BMI originally by British Airways, while I do not want to comment on Loganair’s situation, they have reverted and are formally subject to the competition rules as applied previously. If the hon. Member for Paisley and Renfrewshire North would like to have a further conversation, I encourage him to take it up with my colleague. In this case, the Aviation Minister is Baroness Vere, so she would be the right person to talk to; I am merely her avatar in the House of Commons.
Question put and agreed to.
The hon. Gentleman asked about retrospective impact, as did the hon. Member for Paisley and Renfrewshire North, and they are right to flag that concern. The hon. Member for Wythenshawe and Sale East is also right that a formal impact assessment was not prepared for the instrument because it will have effect for less than 12 months, although an explanatory memorandum has been published with it. We all wish that we could return to normal and I welcome his appetite for non-intervention. We will continue to monitor impacts as we go, but the formal provision remains as it is.
The hon. Gentleman said it was a pity that the Government could not have intervened more during the covid period, but he will recall that the flexibilities we are now exploiting are precisely because we were able to exit the EU regulations relating to this sector. There was a much more blanket response that we undertook under EU law during the period, as he will recall from having been in his role, so there is now flexibility as a result of exiting those regulations.
On the question of the former Flybe slots that arose from the takeover of BMI originally by British Airways, while I do not want to comment on Loganair’s situation, they have reverted and are formally subject to the competition rules as applied previously. If the hon. Member for Paisley and Renfrewshire North would like to have a further conversation, I encourage him to take it up with my colleague. In this case, the Aviation Minister is Baroness Vere, so she would be the right person to talk to; I am merely her avatar in the House of Commons.
Question put and agreed to.
Committee rose.
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