Air Passenger Rights and Air Travel Organisers’ Licensing (Amendment) (EU Exit) Regulations 2018

Motion to Approve

Moved by

That the draft Regulations laid before the House on 28 November 2018 be approved.

My Lords, these regulations will be made using powers in the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union without a deal. This draft instrument corrects three EU regulations that provide an important consumer protection regime for passengers travelling by air. It also makes some changes to the Civil Aviation (Air Travel Organisers’ Licensing) Regulations 2012, which were amended recently to implement elements of the package travel directive.

The three EU regulations are: Regulation 261/2004, which establishes the rights of passengers, including their right to compensation and assistance if they are denied boarding against their will, or if their flight is cancelled or delayed; Regulation 1107/2006, which establishes the rights of disabled passengers and those with reduced mobility to access air transport, and establishes their right to receive free-of-charge assistance; and Regulation 2027/97, which harmonises the obligations of Community air carriers regarding their liability for injury to passengers and damage to baggage, in line with provisions in the 1999 Montreal Convention.

The package travel directive provides for consumer protection in relation to package holidays and other linked travel arrangements. The directive is implemented in the UK primarily by the Package Travel and Linked Travel Arrangements Regulations 2018. Corrections to these regulations so that they continue to work after exit day have already been made through the Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018.

Provisions under the directive relating to insolvency protection are implemented in part through the Air Travel Organiser’s Licence—ATOL—scheme. The directive provides for the mutual recognition among EEA member states of insolvency protection regimes. This instrument makes changes to the ATOL scheme to reflect that this mutual recognition will no longer apply to the UK after exit day in a no-deal scenario.

The withdrawal Act will retain the three regulations I have just listed in their entirety in UK law on exit day. The draft instrument we are considering makes corrections to these retained EU regulations as well as the 2012 ATOL regulations to ensure that the statute book continues to function correctly after exit day. This means that air passengers can continue to benefit from the rights and protections set out in EU legislation.

On Regulation 261/2004, the substantive rights of passengers to assistance, rebooking and compensation in the event that they are denied boarding or subject to long delays or cancellations remain the same. The EU regulation sets out that these rights apply to passengers travelling on a flight departing any airport in the EU, and flights departing an airport in a third country to an airport in the EU, if the carrier is an EU carrier. This instrument makes changes to the scope of the retained regulation to reflect that the UK will no longer be part of the EU after exit day. The retained regulation will apply in relation to all flights departing an airport in the UK and flights departing an airport in another country if the carrier is a UK carrier.

My Lords, on a previous occasion, the Minister was not able to say how many extra staff the CAA has taken on to deal with this extra responsibility. Is she now able to give us that figure? How much will it cost?

If the noble Lord will wait, I will come on to CAA resourcing. Obviously, we work very closely with the CAA to ensure that it is sufficiently resourced.

Did the Minister say she will tell us how many extra staff are required and how much this will cost at a later stage in the debate? I did not quite catch that.

I will come on to CAA resourcing at a later stage in this speech, if the noble Lord will give me a minute.

Finally, this instrument ensures that the CAA is fully and effectively able to enforce the retained regulation. It sets out that provisions relating to complaints and domestic legislation containing criminal offences for persistent breach by air carriers of provisions in the retained EU regulation apply to the same routes and air carriers as the retained EU regulation itself.

On Regulation 1107/2006, the rights that disabled passengers and persons with reduced mobility are able to benefit from when travelling by air also remain unchanged. These include the right to assistance at airports without additional charge and the right to assistance by air carriers without additional charge. Once again, this instrument ensures full continuity for consumers by making certain that the retained regulation—Regulation 1107/2006—will apply after exit day to passengers using or intending to use commercial passenger air services on departure from, transit through or arrival at UK airports.

Certain provisions will also continue to apply in relation to flights departing from a third-country airport to the UK if the flight is operated by a UK air carrier. Like Regulation 261/2004, these provisions will also apply to flights into the EU from countries other than the UK if the flight is being operated by a UK carrier and flights from third countries to the UK if the flight is being operated by an EU carrier. These provisions set out that: air carriers and tour operators cannot refuse travel to passengers on the grounds of disability or reduced mobility; that if it is not possible for an air carrier, agent or tour operator to accommodate a passenger with a disability or with reduced mobility on the grounds of safety or the size of the aircraft or its doors, the passenger shall be reimbursed or be offered rerouting; and that air carriers are required to provide assistance without additional charge, such as allowing assistance dogs in the cabin of the aircraft and arranging seating suitable to meet the needs of the individual.

This instrument also makes a small number of consequential changes to existing domestic legislation to reflect these changes. Further elements of the 1999 Montreal Convention in relation to insurance were implemented by EU Regulation 785/2004, and the SIs making the necessary corrections to those regulations have already been debated and approved by the House.

Finally, this instrument makes changes to the 2012 ATOL regulations because, in a no-deal scenario, the mutual recognition of insolvency protection regimes under the package travel directive will no longer apply to the UK after exit day. One of these changes is to require businesses established in the EU or EEA, and their agents who wish to sell in the UK, to hold an Air Travel Organiser’s Licence. This ensures that consumers who have purchased a package including an element of air travel continue to be protected if mutual recognition of insolvency protection regimes between the UK and EU or EEA member states ceases in the event of a no-deal exit.

The instrument also removes the requirement for UK companies to hold an ATOL in respect of sales in EU or EEA member states. This reflects that without mutual recognition, these companies would already be required to comply with the insolvency protection regime of the member states they are selling in, and would otherwise be required to hold duplicate protection.

My Lords, the Minister is talking about EEA-registered operators that operate in the UK. An issue was raised in the House of Commons about whether there would be full ATOL protection in respect of people purchasing packages in the UK under those EEA-registered operators. The Minister there was not able to give an answer but said that he would write to MPs. I have not seen a copy of that letter—could the Minister tell us the answer to that specific point, which of course will be quite significant if there is no deal?

I hope I can answer the noble Lord’s question. Those EU and EEA companies which sell package holidays in the UK will need to be covered by the ATOL scheme. They will need to apply for an ATOL from the CAA. We believe that there are only about 13 such companies.

Is the Minister saying that that will be a requirement under these regulations? Is she saying that there will be full ATOL protection for all passengers and purchasers of package holidays in that eventuality?

Yes, that is what I am saying. As I said, at the moment there are only 13 EEA-established businesses currently selling to the UK that would be affected by the requirement, and the CAA is used to processing around 1,000 cases a year. Therefore, in answer to the question put by the noble Lord, Lord Foulkes, the CAA is confident that it is fully resourced to achieve this.

My question is not whether the CAA is fully resourced. My question—which I asked in Grand Committee a number of weeks ago, so the Minister has had plenty of notice of it—is how many extra staff is the CAA taking on, and how much extra is it going to cost? She said she was going to answer it later in her speech. Could she please answer it now?