HC Deb 18 June 1984 vol 62 cc1-3
1. Mr. Colvin

asked the Secretary of State for Transport if he has yet completed his review of the interim assessment of the consultation on airline competition policy conducted by the Civil Aviation Authority.

The Secretary of State for Transport (Mr. Nicholas Ridley)

The interim assessment contains some important ideas, but it would not be appropriate for me to comment on them as its purpose is to elicit comment from the British civil air transport industry and its users. The authority should report its conclusions on the review by mid-July.

Mr. Colvin

I thank my right hon. Friend for that reply. I gather that the final report will be out soon. Does he accept that, because British Airways is comfortably into profit and well en route for privatisation, further competition with that company on its existing routes would be healthy? Does he further accept that hiving off routes that have taken British Airways some 60 years to acquire and on which it competes with about 200 companies in international air transport would be very damaging to the prospect of BA's public flotation.

Mr. Ridley

I join my hon. Friend in congratulating Lord King and his board on transforming the airline from a heavy loss maker to a high profit earner. I cannot, however, comment at this stage on my hon. Friend's views, because the matter is before the Civil Aviation Authority for review. We should like to hear everyone's views. I am the only one who cannot give views at this stage.

Mr. Cartwright

How does the Secretary of State intend to allay the obvious fears of independent airlines that they are likely to be steamrollered by a newly privatised British Airways, which has been built up to its present dominant position by the investment of substantial public funds?

Mr. Ridley

That concern is at the heart of questions put to the Civil Aviation Authority. We should await its views on those topics. I am sure that the House will then want to return to the matter in the light of the Government's decision, which will be based on the authority's views. They will be put forward next month.

Mr. Soames

Does my right hon. Friend acknowledge that these are difficult times for the employees of British Air Tours and of British Caledonian Airways, both of which are in my constituency, because of the uncertainty that is hanging over them before the publication of the CAA report? Will my right hon. Friend be able to make a statement on the report before the summer recess?

Mr. Ridley

Change always makes for uncertainty. One of the features of modern life is that change seems to be accelerating in almost every industry. I have sympathy with those who are affected, but that is not an argument against change. I do not know how the Government will handle the CAA report, and I have to reserve my position as to when we shall make it public and give our views. The report will be made public and the Government will give their views as soon as possible.

Mr. Robert Atkins

Does my right hon. Friend recognise the contribution to the improvement in British Airways' operations that has been created by the activities of companies such as British Midland Airways, Britannia Airways and British Caledonian Airways in raising the levels of competition and of service to the customer? When he takes into account the views about the report that will come from a variety of people, will he recognise their genuine fears about the effects of British Airways' continuing monopoly in the market?

Mr. Ridley

My hon. Friend and I stand absolutely together on the virtues of competition in this industry, as in others. That is why I am trying to introduce more realistic competition into the European airline market as well as into domestic routes. However, I am sure my hon. Friend will agree that competition must be not only free, but fair. That is at the heart of the problem that we have posed to the CAA.

Mr. Prescott

Has the Secretary of State seen the report in Accountancy Age, which makes it clear that British Airways' interim accounts seem to have been massaged considerably, in the interest of share purchasers rather than taxpayers?

Mr. Ridley

I have not seen that article, but I have taken all possible care to urge the British Airways Board to ensure that all its financial reporting is based on the most accurate figures possible.