Airlines and airports: supporting recovery in the UK aviation sector

The way in which the Government introduced international travel restrictions during the pandemic was inconsistent, confusing industry and passengers. The aviation industry, which connects the UK to the world, experienced severe economic difficulties due to Government restrictions that were not based on scientific consensus. As international travel restarted in the summer of 2021, the industry, its workforce and passengers were subjected to a traffic light system that was opaque, ambiguous and inconsistent. Government restrictions on international travel throughout the pandemic were disproportionate to the risks to public health.

The reimposition of travel restrictions had little effect on the spread of the Omicron variant in the UK. The Government appeared to recognise that outcome and belatedly reversed most of those restrictions in early January 2022. Overly strict international travel restrictions can have unintended consequences, such as encouraging countries not to report Variants of Concern for fear of experiencing negative economic effects.

We welcome the Government’s decision to remove all international travel requirements. We also welcome the Government’s statement that future international travel contingency measures will only be implemented in extreme circumstances. That decision gives the UK a competitive advantage over countries that were slower to remove such restrictions, providing an incentive for tourists and businesspeople alike to visit the UK. Enabling test-free travel makes the UK a more attractive destination for tourists and business travellers, who will support the country’s economic recovery from the pandemic. The Government has intimated that it will continue to monitor coronavirus outbreaks and new variants, but it must make clear what that monitoring mechanism will entail and how it will be funded.

As the aviation industry’s economic recovery from the coronavirus pandemic is now well under way, the Government’s aviation recovery plan must be published as a priority. That strategy should be published no later than 1 June 2022, when the summer travel season will begin in earnest.

The Government must build international travel into its future pandemic resilience planning, developing a transparent and predictable system that can be used to facilitate safe international travel during potential future health crises. The Government’s strategy for the recovery of the aviation sector must include a commitment to developing such a plan.

The Government must set up an international travel toolkit based on the following principles: • International travel restrictions must be evidenced by transparent advice and analysis that the Government makes publicly available. Such analysis must detail the rationale and evidence as to why such restrictions are deemed effective, UK aviation: reform for take-off 47 considering both public health and economic factors. The process must allow for formal representations to be made from affected sectors, primarily the aviation and travel industries. As in Germany, restrictions should be agreed on a cross- departmental basis with an equal voice from the Department for Transport and the Department of Health and Social Care. • Any restrictions on international travel must be proportionate and comparable to those in place across the rest of the UK economy. Where the Government imposes future coronavirus restrictions on the international travel industry, and where such restrictions do not apply on a comparable basis to the domestic economy, the Government must compensate the industry for the economic loss suffered.

The Government must convene a global taskforce to promote the standardisation of the remaining international travel requirements that were introduced in response to the coronavirus pandemic. The Government should pursue bilateral negotiations with countries with high rates of vaccination to facilitate the removal of such restrictions. (Paragraph 35) Consumer rights

Under-regulation has resulted in a dysfunctional travel testing market. The travel testing market was established with no clear protections or means of recourse for consumers. To date, the onus has been on consumers to perform market research, which has required them to navigate often misleading claims by companies. Unclear pricing, misleading advertisements and delays in receiving tests and test results still persist more than a year after the Government first introduced travel testing requirements. The Government has been far too slow to address those issues.

Although the UK has, at the time of writing (April 2022), removed all testing requirements for international travel, many other countries have retained testing requirements. Therefore, some passengers will need to access safe and affordable coronavirus testing options in the near-to-medium term. Government intervention is required to establish a functional market for travel testing to benefit consumers. That intervention should include: a) implementing in full the Competition and Markets Authority’s recommendations for regulating the PCR travel testing market, so that if PCR tests are reintroduced as a travel requirement, the market will function fairly for consumers; and b) tasking the Competition and Markets Authority to review the operation of the market for antigen travel tests to follow the regulator’s September 2021 review of the PCR testing market.

The Government must introduce an Airline Insolvency Bill in the next Session of Parliament to set out a framework to handle future airline insolvencies to protect the interests of consumers, employees and taxpayers.

In April 2021, the Global Travel Taskforce recommended that the Government consult on additional, flexible and modern tools to enforce consumer rights before 48 UK aviation: reform for take-off the end of 2021. Although long overdue, the Government is now consulting on the merits of granting the Civil Aviation Authority additional powers to enforce aviation consumer protection laws. The Civil Aviation Authority urgently requires the power to impose financial penalties on airlines that do not provide complete refunds to consumers when they are required to do so by law.

In the absence of additional powers, the Civil Aviation Authority must utilise its existing powers to challenge businesses and to pursue enforcement orders from the courts to tackle infringements of consumer rights in relation to refunds. Although that process may be lengthy and costly for the regulator, it is the best form of recourse available to consumers trying to secure refunds, until the Civil Aviation Authority is granted the power to impose financial penalties.

The Government must introduce a mechanism to ensure that when entitled to a refund by law, airline passengers are granted automatic compensation, eliminating the need for customers manually to apply for a refund.

We welcome the Government’s decision to seek views on the length of delay that should trigger compensation for domestic flights as part of its airline passenger rights consultation, as well as the requirement that all airlines that fly to and from the UK participate in the alternative dispute resolution scheme. However, the Committee is concerned that the effect of the Government’s proposed compensation scheme, which is out for consultation, could result in much reduced compensation for passengers, albeit it that a greater number of passengers may benefit from such a scheme. Although moving to a compensation scheme that is similar to the Delay Repay rail scheme might be desirable for consistency, in many cases flight delays are far more costly to the passenger than a delayed rail journey. Delayed air passengers can face missing holidays or increased travel and accommodation costs. The Government must take those factors into account in designing a new scheme.

It is disappointing that the Government’s ‘reforming aviation consumer policy: protecting air passenger rights’ consultation does not seek views on the enforcement of consumer rights in relation to the private testing market for travel. The consultation should be expanded to assess how the private travel testing market could be regulated to make it function effectively for consumers. (Paragraph 70) Domestic air connectivity

Implementing more flexible rules on the provision of Public Service Obligation routes can improve connectivity between the four nations of the UK. To improve domestic air connectivity, we agree with the Union Connectivity Review’s recommendation that the Government must revise subsidy rules to allow: a) multiple airlines to operate individual PSO routes, fostering a competitive market for regional services; and b) central Government to fund PSO routes between and within the UK’s four nations. UK aviation: reform for take-off 49 We also recommend that central Government agree which routes should be funded and how much funding should be allocated to those routes in consultation with the devolved Administrations.

The Government’s changes to Air Passenger Duty are welcome. However, that system will not be introduced until 1 April 2023. The Government should bring that date forward to 1 July 2022 to support domestic routes that might otherwise collapse because of the coronavirus pandemic. (Paragraph 83) Sustainable aviation

The delivery of the airspace modernisation strategy cannot be subject to further delay. Urgent attention is required if the strategy’s target deadlines are to be met. The need to deliver the strategy’s initiatives is particularly acute in the context of the Government’s decarbonisation targets and the expectation that passenger numbers will return to pre-pandemic levels in the next two years.

Despite the importance of airspace modernisation, and the relative speed with which it could be introduced compared with other decarbonisation measures, the Airspace Change Organising Group is not a member of the Jet Zero Council. The Committee recommends that the Airspace Change Organising Group should be elevated to full membership of the Jet Zero Council. That would signal the serious intent of the Government to implement the required changes to airspace modernisation as quickly as possible.

The Government must take steps to limit greenhouse gas emissions as air transport movements increase. The Government should continue to invest in new aviation decarbonisation technologies, including synthetic aviation fuels, to ensure that the UK aviation sector emits less than it did before the pandemic.

If the Government is to achieve its targets on net-zero aviation, new sustainability policies will be required for the aviation sector, which in turn will require robust regulation. The Government must review how the Civil Aviation Authority’s powers can be reformed to enable the regulator to enforce environmental mandates that the Government may introduce for the aviation sector.

The Government must introduce a market mechanism to support investment in sustainable aviation technologies. The Committee has been investigating market mechanisms that the Government might introduce to scale up alternative fuels in our ongoing inquiry, Fuelling the future: motive power and connectivity. We will report on our findings at the conclusion of that inquiry. (Paragraph 107) Slots

The Government must not reimpose the 80:20 rule until the effects of the Russian invasion of Ukraine on the UK aviation market are apparent. That will protect against a potential increase in the number of ghost flights operated by legacy carriers seeking to protect their slots. (Paragraph 118) 50 UK aviation: reform for take-off

The Government must include a review of the slot allocation system in its strategy for the recovery of the UK aviation sector. The strategy must: a) consider alternatives to the existing slots framework to encourage new entrants, capitalising on the opportunity to shape the system following the country’s departure from the EU; and b) review how ‘ghost flights’, undertaken by legacy carriers seeking to maintain control of their slots, might be mitigated. The Government must co-ordinate with the Competition and Markets Authority and Airport Coordination Limited in carrying out the review. (Paragraph 119) Heathrow price control review

The Civil Aviation Authority must factor in the premise that Heathrow is one of the most expensive global airports when making its decision on the price control. Ensuring that the airport’s charging is set at a fair range can create a competitive edge for Heathrow, making it more attractive for airlines to operate out of compared with other European hub airports.

The UK aviation sector’s recovery from the pandemic is still in its early stages. The Civil Aviation Authority’s price control proposals, due to be implemented in summer 2022, must be postponed by one year to allow the collection of further data on the aviation sector recovery. (Paragraph 131) Airport disruption April 2022

To help airports and airlines manage the sudden increase in demand for aviation, the Government should: • prioritise the timely processing of checks for applicants for positions at airports; • allow applicants for airport positions to start supervised classroom training, when their initial security checks are complete; • review whether the number of trainees compared with supervising security officers can be increased from the current 3:1 ratio; • instruct HM Revenue & Customs to provide applicants with personal statements to enable applicants to cover any gaps in their tax and employment status caused by their employers going out of business due to coronavirus; and • ensure that Border Force uses all the means at its disposal to minimise queues at airports, including deploying onsite engineers to maintain e-gates in real time and allowing under-12s to use e-gates. Any such changes should not decrease security standards at airports. Some of those recommendations may require the Government to deviate from legislation introduced when the UK was an EU Member State. Such changes could be quickly introduced under the negative Statutory Instrument procedure. (Paragraph 138) UK aviation: reform for take-off 51