HL Deb 14 May 1987 vol 487 cc719-21

3.14 p.m.

Baroness Burton of Coventry

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether the British Airways plan for transatlantic passengers, offering a round trip to any of British Airways 45 European destinations free to anyone who bought a British Airways ticket to Heathrow, was formally approved by the Civil Aviation Authority and, if so, what action they have taken to support such approval.

The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)

My Lords, the Civil Aviation Authority formally approved British Airways' fare proposal but the United States Department of Transportation disapproved it. The UK-USA Air Services Agreement requires all tariffs for public transport between the two countries involving the airlines of the two parties to be approved by both sides. Tariff initiatives sometimes fail to get approval when one or both governments consider that they do not satisfy the criteria set out in that agreement. United Kingdom and United States government officials tried without success to find a solution to the matter.

Baroness Burton of Coventry

My Lords, I thank the Minister for that comprehensive reply, but is it not correct that Mr. Spicer has stressed the importance of the European market being treated as a single entity? Is it not true that the British Airways' plan, as supported by the CAA, would have been an important step in that direction? Can the Minister say whether the Government or the CAA are contemplating any further action in respect of the matter?

Lord Brabazon of Tara

My Lords, I entirely agree with the remarks of my honourable friend Mr. Spicer as regards the European market. I wholly endorse the view that many European countries remain too protectionist. This matter was between the United States Department of Transportation and our Civil Aviation Authority. I am afraid that the United States Department of Transportation failed to approve the fares.

Lord Underhill

My Lords, if British Airways considers that such an offer is commercially good for it because in effect it reduces fares, does the Minister agree that that is an excellent example for BA to set for reducing fares in Europe?

Lord Brabazon of Tara

My Lords, the offer of British Airways—which was followed by a similar offer from British Caledonian—was for a limited period only. I believe that it was originally planned to last for six weeks; a fairly short period of time in the tourist calendar. It would have been good for their business, and British Airways are looking forward to the time when we reach agreement on European air fares. I am sure that they will be ready to compete when that time comes.

Lord Morris

My Lords, will the Minister say how the United States civil aviation authorities managed to reconcile licensing the United States airlines for cross-state agreements with airlines coming into a United States port of entry, but disagree with British Airways doing precisely the same thing in respect of European airlines?

Lord Brabazon of Tara

My Lords, we vetoed a proposal by the United States airlines as regards transatlantic flights including free internal flights in the United States because the internal market in the United States is entirely closed to our airlines, whereas United States airlines operate in Europe.

Baroness Burton of Coventry

My Lords, can the Minister help a little further? Is he aware that my information is that five European governments, in addition to America, were also attacking the British Airways plan because they were afraid that it would damage their pooling arrangements, which we all should like to see abolished? Will the Minister further agree that so long as European governments support their own national airlines in this matter, we shall make no progress on liberalising air fares for the general public?

Lord Brabazon of Tara

My Lords, I certainly agree with the second half of the noble Baroness's question. I hope that over the course of many questions we have made clear that we believe the European market should be opened up. One of the purposes of working towards such a market is to strengthen the European airline industry as a whole in its relations with airlines from outside Europe. Regarding the point about five European governments having disapproved of this proposal, I am afraid that, the Americans having turned it down, that stage was never reached. It would have had to be endorsed by the Europeans, but it never reached that stage.

Baroness Burton of Coventry

My Lords, as regards that last point, I should like to ask the Minister this: because I have information to the contrary that those five governments have done so, if I give him the names outside this Chamber, will he have the matter inquired into and write to me?

Lord Brabazon of Tara

My Lords, I shall certainly do my best to do so. I did not mean to imply that they had not sought to influence the United States Government: that may well have been the case. However, they never reached the stage of having to give formal approval.