HL Deb 18 May 1990 vol 519 cc471-2

11.15 a.m.

Lord Gainford asked Her Majesty's Government: What efforts are being made to further the liberalisation of air transport.

Viscount Ullswater

My Lords, the Government are committed to the liberalisation of air transport. We seek to conclude liberal bilateral agreements with individual countries wherever possible. Within the European Community, the Government have taken a leading role in progress towards a single market in aviation. A first package of liberalising measures was agreed by EC Transport Ministers in 1987 and agreement is due to be reached on a second package of measures by the end of June this year.

Lord Gainford

My Lords, I thank my noble friend for that Answer. Has he any information on the progress of liberalisation proposals made by the Council of Ministers on 4th and 5th December last year?

Viscount Ullswater

Yes, my Lords. The Council of Ministers agreed in principle on the key ingredients of the single market in aviation. Those ingredients were the introduction of the double disapproval system for setting fares; the abolition of bilateral capacity sharing by 1st January 1993; and the introduction of Community-wide licensing criteria by 1st July 1992. The second stage, due to be agreed by the end of June 1990, will essentially build on the first package of measures agreed in 1987. It will provide for interim agreements which will operate until the completion of the internal market which was discussed at that meeting.

Lord Underhill

My Lords, does the Minister agree that it is important to dispel any view that liberalisation means a complete free-for-all in civil aviation? Will it not be desirable for there still to be some degree of regulation to carry out the welcome assurances given by his noble friend Lord Davidson yesterday and to ensure that there is always safe air space for planes to travel in, always airports to land at and the utmost degree of aircraft security?

Viscount Ullswater

Yes, my Lords, I should be happy to agree with everything that the noble Lord has said, which is a nice opportunity for me. However, I must also point out that liberalisation will afford airlines greater freedom to exercise their own commercial judgments concerning the setting of fares and the type of service provided. It is expected that the second package will further relax restrictions on market access and the approval of fares.

Lord Harris of Greenwich

My Lords, is the noble Viscount aware that virtually all of us warmly welcome any action to break up the European cartel on air fares? However, is he aware of the serious problems at present facing some of the smaller British airlines and the anxiety felt by many at the increasing, monopolistic power of British Airways?

Viscount Ullwater

My Lords, the noble Lord has a fair point. It is important that, in order to engender competition, the fate of the smaller airlines should be taken into consideration when the routes are designated and the sharing of routes is undertaken.