HC Deb 07 July 1992 vol 211 cc107-9W
Mr. Sproat

To ask the Secretary of State for Transport (1) under what circumstances he is required to give approval for an air fare for scheduled flights in or out of the United Kingdom;

(2) if he will set out the exact process by which an application for the setting of an airfare, for which he is required to give approval, is made; to what extent it involves (a) the Civil Aviation Authority, (b) officials of his Department, (c) any other body and (d) Ministers.

Mr. Norris

At present, the Civil Aviation Authority has the power to regulate air fares. Fares on scheduled services within the EC performed by EC carriers have to be approved if they are reasonably related to the carrier's long-term fully allocated relevant costs, or otherwise meet the requirements of current EC legislation. Fares on services to points outside the EC are governed by bilateral arrangements. From 1 January 1993 all fares within the EC are to be set by free pricing: there will no longer be an approval system.

Mr. Sproat

To ask the Secretary of State for Transport (1) what powers he has to regulate the air fares of British charter airlines;

(2) what powers he has to regulate the air fares of non-British charter airlines flying in and out of the United Kingdom.

Mr. Norris

The cost of a seat on a charter flight is part of the overall cost of the package offered by the tour operator.

As from 1 January 1993, European Community arrangements will cover charter services for the first time. Existing practice will be continued, as those arrangements stipulate that charter rates are to be determined by free negotiation between the parties concerned.

Mr. Sproat

To ask the Secretary of State for Transport (1) if he will set out the powers he has to reject, vary, or accept applications for levels of air fares for(a) British scheduled airlines and (b) non-British scheduled airlines on routes other than EC or transatlantic;

(2) if he will set out what powers he has to reject, vary, or accept applications for levels of air fares for (a) British scheduled airlines and (b) non-British scheduled airlines on transatlantic routes.

Mr. Norris

The Civil Aviation Authority has power to regulate air fares(a) in the case of United Kingdom airlines, under the air transport licensing provisions of the Civil Aviation Act 1982 and (b) in the case of airlines using foreign-registered aircraft, under part X of the Air Navigation Order 1989. In approving or disapproving a fare for international services the Civil Aviation Authority will have regard to the United Kingdom's international obligations.

Mr. Sproat

To ask the Secretary of State for Transport if he will set out the powers he has to reject, vary, or accept applications for levels of air fares for(a) British scheduled airlines and (b) non-British scheduled airlines on EC routes.

Mr. Norris

EC regulation 2342/90 presently covers the setting of fares on scheduled services within the EC performed by British and other EC carriers. Generally, fares have to be approved if they are related to the carrier's costs. Fares charged by carriers from third countries on EC routes are governed by the bilateral agreements under which those services are permitted.

Arrangements for EC carriers operating within the EC will change substantially on 1 January 1993 when free pricing is introduced for all carriers. The approval system disappears, and a carrier can bring in a fare on 24 hours' notice.

There will be a safeguard against unfair pricing; but in agreeing this new regulation the Council and Commission made it clear that this safeguard was not intended as a means to reimpose a pricing policy on carriers. In the United Kingdom, whilst fares will be notified to the CAA, it will be for the Secretary of State to decide whether the safeguard should be activated.

Mr. Sproat

To ask the Secretary of State for Transport what is the date of the next meeting between his Department and the relevant United States authorities to discuss the Bermuda agreement.

Mr. Norris

The next round of discussions with the US authorities about possible liberalisation of the Bermuda 2 air services agreement is due to begin on 20 July.