Aviation (Consumers) (Amendment) Regulations 2023

Lord Davies of Gower Excerpts

Wednesday 6th December 2023 Grand Committee

Moved by

[Lord Davies of Gower]

That the Grand Committee do consider the Aviation (Consumers) (Amendment) Regulations 2023.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Davies of Gower) (Con)]

My Lords, these regulations were laid in draft before this House on 16 October 2023. The purpose of this statutory instrument is to restate, using powers under the Retained EU Law (Revocation and Reform) Act 2023, key principles of retained EU case law relating to regulation 261/2004. This will help aviation consumers to receive the same protections they currently have when faced with flight disruptions.

Regulation 261/2004, which will become assimilated law at the end of 2023, sets out the rules on compensation and assistance for air passengers in the event of denied boarding, flight cancellation or long delay. Regulation 261/2004 has been the subject of significant amounts of litigation, and the associated case law has shaped the interpretation of this legislation. However, the retained EU law Act will also make it easier for courts to depart from EU case law after the end of 2023. This means that, without the changes made by this instrument, important principles that protect consumers in the UK would be lost.

The SI codifies four key principles needed to maintain the current protections for air passengers, by inserting them into regulation 261/2004. First, passengers will continue to be afforded the right to compensation under Article 7 of regulation 261/2004 where flight delay results in arrival at the passenger’s final destination three or more hours after the scheduled arrival time.

Secondly, the SI codifies principles that make it clear that the rights to compensation, refunds, rerouting, and care and assistance fall within the scope of regulation 261/2004—not Articles 19 or 29 of the Montreal Convention. The Montreal Convention is an international treaty governing airline liability and relates in part to delay of passengers. This is an important point of clarity that will help passengers continue to receive the rights they are currently entitled to, rather than the more limited rights under the Montreal Convention.

Thirdly, the SI clarifies that, for the purpose of regulation 261/2004, a flight comprised of more than one leg will be treated as a whole if it is booked as a single unit, and that such a flight will be considered as departing from the point of departure of the first leg of the journey. This is important because compensation under regulation 261/2004 is linked to the length of the journey and the territory or jurisdictions covered.

Finally, the SI codifies the principle of “extraordinary circumstances” into a clear definition of that term. Such circumstances may give rise to an air carrier being exempt from the requirement to pay compensation. What constitutes “extraordinary circumstances” is a highly litigated topic, so it is important to codify the EU case law in order to provide clarity. I beg to move.

[Lord Jones (Lab)]

My Lords, I thank the Minister for his competent and helpful introduction. Complex and dense though these regulations may be, I see no reason not to support them.

To what degree do the regulations impinge on Cardiff Airport? It has often been in the news. How many airport consumers were there this year and last year? How many cancellations were there? Can the Minister give any feedback as to consumer satisfaction? Has there been any discontent? What is his general view of the future? Does the consumer in greater south Wales have any difficulty accessing Cardiff Airport? As a percentage, how many airport consumers instead make for Bristol or Heathrow airports? Perhaps the Minister will write if these questions are not to be answered in this debate.

The purchase of Cardiff Airport by the Senedd, the excellent Government in Cardiff, was controversial to some degree. Might the Minister say what the situation is now? I acknowledge the Minister’s service to Wales when he was a Member in the other place. He represented one of the finest coastlines in Europe—Langland, Oxwich and Three Cliffs come to mind, and he might know that these bays are fine for swimming; it is truly an area of natural beauty.

There is no aviation without the aerospace industry, and the Minister knows that both are vital to the economy of Wales—for example, Airbus, at Broughton, in north-east Wales, where direct employment involves some 5,000 employees. There is also, as he will know, a big aviation interest in south Wales. These two industries involve a great reservoir of national skills, and these skills in Wales are priceless. Airbus, at Broughton, is a world-class centre in wing manufacture. What links are there between Airbus UK and His Majesty’s Government? How are the interests of the consumer represented?

The Explanatory Memorandum is helpful. The regulations are, of necessity, complex, as is the Explanatory Memorandum in parts—all the pages require insight. However, it is very good to see the word consumers writ large.

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[Lord Tunnicliffe (Lab)]

My Lords, these regulations establish rules relating to compensation and passenger assistance in the event of denied boarding, cancellation or long delays. The instrument maintains the status quo and aims to offer clarity, following multiple legal challenges. We therefore do not oppose its introduction. Indeed, I thank the Government for bringing forward these regulations.

However, why are we debating these regulations today? As the Joint Committee on Statutory Instruments pointed out, the instrument is within the scope of the negative procedure, so Ministers have decided that the alternative is more appropriate. Can the noble Lord elaborate on this?

Turning to the measures contained in the regulations, I note that their main purpose is to remove ambiguity rather than set new policy. Will the Minister explain which cases these clarifications relate to?

Will the Minister elaborate on the issue of extraordinary circumstances a little more? At first I thought the definition in the instrument was pretty clear, but a number of people have since commented that it is not as clear as it looks and anything that he can add will be helpful. On the drafting process, can the Minister explain what informal consultations took place to prepare this instrument? While I understand that no review clause is required as it is made under the REUL Act, will the Minister explain how the department will monitor its implementation? Given that the Minister in the House of Commons was unable to answer this point, will the Minister say whether the tariffs referenced will be subject to inflationary increases?

Somewhat at the last minute, I picked up recent rumours that some airlines have reacted to the requirement to pay this tariff by substituting vouchers—indeed, in some cases vouchers with expiry dates—instead of cash. That does not seem to be within the spirit of the regulations. Given that the essence of this instrument is to clarify the situation, I would value the Minister’s comments on this. Do the Government believe these rumours are true? If they are, does this instrument in any way help? If not, will he address the issue and go to what I think is the implied standard, which has to be pure cash? I hope the Minister can provide clarity on these points.

[Lord Davies of Gower (Con)]

My Lords, I thank noble Lords for their contributions to this debate, in which issues that are to some extent technical have been raised.

I will start by responding to the issues about Cardiff Airport raised by the noble Lord, Lord Jones. I well remember Cardiff Airport being taken under Welsh government control. At the time, I was a member of the then National Assembly for Wales. There were sceptical views about it at the time, but the Welsh Government have taken it on and still own it. Indeed, we all wish it well, but it has gone through some difficulties and has been supported financially by the Welsh Government. In answer to his question on cancellations, consumer feedback and access to the airport, I do not have that information to hand, so I will have to come back to him in writing. The Welsh Government will be responsible for a lot of it.

The Government have strong relationships with Airbus UK, for obvious reasons, but more than that I cannot say at the moment.

I thank my noble friend Lord Jackson for his remarks. The instrument is about maintaining current consumer protection for air passengers. The Act’s powers were not considered the appropriate vehicle to undertake a full review of regulation 261/2004. However, the Department for Transport committed to consult further on compensation and payment frameworks for flight disruption in its response to the aviation consumer policy reform consultation. This is a complicated area of law, and any potential reform requires careful consideration and consultation with the European Union under Article 438 of the trade and co-operation agreement.

It was not considered necessary to codify any other EU case law principles, beyond those identified. The four principles restated in this instrument have been identified as necessary to be codified in order to maintain the status quo for consumer rights in relation to flight disruptions—that is, for denied boarding, flight cancellations and long delay. In interpreting retained consumer aviation EU law in the UK, the courts are likely to adopt a purposive approach. This means that the courts will consider the intended purpose of the regulation, rather than solely relying on the literal meaning of the words.

A question came up on consultation. The department has committed to further consultation on regulation 261. I think another question came up from one noble Lord on air traffic management. That is very fact-specific and I cannot at this moment provide specifics in respect of the legislation.

Going back to the retained EU law Act, its powers operate on assimilated law, while restatements such as those that this instrument makes are not assimilated law. Once the instrument is made, any further amendments to the regulation on these precise topics would therefore require primary legislation. It may be possible for certain retained EU law Act powers to be used to further codify assimilated EU case law, in the event that further principles, separate to those in this instrument, are identified as requiring codification. However, it is not considered necessary at this time to codify any other principles of EU case law relating to regulation 261/2004.

Noble Lords asked about informal consultations. We have had sessions with industry and consumer groups on this.

Perhaps I could just cover the consequences of not making this instrument. If it is not made, there would be a reduction in the protections available to consumers when travelling by air under UK law after the end of 2023. For example, UK courts would be more likely to find that passengers subject to long delays—that is, a delay of three hours or more in reaching their final destination—would not be entitled to compensation. Such a reduction in consumer protections would not only be an unacceptable policy but risk breaching the shared objective under Article 438 of the trade and co-operation agreement to achieve a high level of consumer protections for air travel.

I know that some other more technical questions were asked, which I will certainly look at and write on. The noble Lord, Lord Tunnicliffe, brought up a couple of questions which I am not able to answer at the moment, but I will certainly look at them and write to him.

[Lord Tunnicliffe (Lab)]

I wonder whether the noble Lord could adopt the convention that when he writes to one of us, he copies in everybody who has been part of this debate. I do not know whether he has ever tried to retrieve a document from the Library, but it is an uphill battle.

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[Lord Davies of Gower (Con)]

Absolutely. Of course, I undertake to do that.

In closing, these regulations will help air passengers to receive the same protections they are currently entitled to if their flights are disrupted. Not only is it important for passengers to have protections in place for such instances; it is vital for improving consumer confidence in the sector, following the disruption we saw during and after the Covid-19 pandemic. I will leave it there and commend the regulations to the Committee.

Motion agreed.