Future of Aviation (HC 499-vi) Transport Committee 15 Jul 2009

Q503 Mr. Eric Martlew (Carlisle): Gentlemen, obviously we have taken evidence from other people and the reality, from what I hear - and obviously it is to varying degrees - you are all worried about climate change but you are all going to fly. Is that a reasonable assessment of your views and those of the young people you represent?

Mr Ali: In some cases, yes. For example, two weeks ago I got back from America. How else could I go to America apart from flying? I am not going to take a ferry across.

Q504 Mr. Eric Martlew (Carlisle): You need not have gone to America, of course.

Mr Ali: I have a few weeks off school. I am on holiday. Quite a lot of young people want to go abroad just for a holiday, especially after 16. I know that quite a few of my friends have got involved with friends in the EU. There is no way of getting to different countries, especially if it is outside Europe, other than air travel. I do not think there is anything you can do about that. What we need to concentrate on are the short-haul flights in Europe itself, and perhaps have some high-speed rail networks across Europe.

Mr Kempley: I think that we are all partially guilty of not feeling a personal responsibility when we are actually looking at these problems. It is very easy to think, "Well, I'm just one individual. If I don't go on this flight it is still going to fly". It is a matter of trying to change that culture, and it is a very challenging thing to do - where you think, "My action probably won't make a difference but if everyone does that and I am part of that, it will make a bigger difference". It is a very difficult thing to get into that mindset, though. I agree with you.

Q505 Mr. Eric Martlew (Carlisle): Obviously you have different ways of getting elected. Do you think that if you stood on the platform of saying, "We are going to restrict severely people's ability to fly", you would get elected?

Mr Carter: First of all, it is pretty inconceivable to say, "We're going to restrict people's ability to fly". Second, it comes back to what I said about awareness and education. Young people would not know the implications of their flying themselves. Also, we are living in quite a fast-paced world and a world becoming a smaller place; so transport systems do have to accommodate this. Young people will just have to become part of the system and will have to be used to this fast-paced world, and therefore be used to flying. Again, it is education and awareness - young people knowing the implications of flying. And they do not. On your point, if we put that in the manifesto, I think that young people would just ignore it, to be honest.

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Mr. Eric Martlew (Carlisle): Chairman, I am very aware that we are likely to be voting at four o'clock, so we should all get a turn to talk to the Secretary of State.

Chairman: Mr Pritchard, perhaps I may remind you that Lord Adonis has agreed to come to this Committee at another time to speak on more general matters and I would like to deal with some of the aviation issues.

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Q531 Mr. Eric Martlew (Carlisle): Secretary of State, I am becoming increasingly concerned about a situation where we could have a major failure of an airline. Obviously BA does not seem to be doing too well at the moment. I am not suggesting that they are going to go bust. What is the Government doing to protect passengers, to get them back if we have a major airline that goes bankrupt?

Lord Adonis: Of course, we have the ATOL scheme and we have arrangement for bringing passengers back in the event of there being a major failure. With the failure of XL last year, of course, we did have to bring large numbers back. I am glad to say that that exercise was accomplished very largely successfully.

Q532 Mr. Eric Martlew (Carlisle): The Government has always refused, and up until probably the last three months I agreed with the Government, to put a levy on a ticket of perhaps £1 to pay for this. Are you not concerned that if something goes wrong the Government will end up with a big bill?

Lord Adonis: There are two different issues here. The ATOL scheme, which protects those who are on package holidays and therefore typically have much larger outlays in respect of their holidays - we do accept that there is a responsibility to protect them and we are looking, in the light of experience with XL last year, at how that scheme can be improved. So far as people with ticket-only are concerned, I do understand the arguments that have been made for a levy, but our view is that this would be a big additional cost to passengers. It raises issues in terms of European competition law, and we think it is reasonable to expect that people could make arrangements to get back themselves where they have a ticket-only purchase.

Q533 Mr. Eric Martlew (Carlisle): Basically, if, say, easyJet, Ryanair or BA suddenly become bankrupt, then the Government will not put any money into getting people back. You mentioned the other scheme but that is just for package holidays, which is a very small percentage of travel.

Lord Adonis: We are dealing with a hypothetical situation, which I very much hope will not occur and that we have no reason to expect will. Am I saying that, if there were to be such a hypothetical event, the Government would have no responsibility? Of course, you would expect the Government to be very concerned indeed that people got home. But to your particular point - do we think it is an appropriate act of public policy to place a levy on all tickets that will be required to extend the ATOL scheme to ticket-only purchases? - we think that would be disproportionate.

Chairman: We have received a significant amount of evidence both in this inquiry and previous inquiries indicating a major problem in that area, so there are very good reasons for Mr Martlew's questions.

Q534 Mr. Eric Martlew (Carlisle): Can we draw the analogy with the banks? The Government is making the banks keep more money in the bank to pay for unforeseen issues. Is that not a way forward? We should perhaps ask the airlines to keep more money in reserve, so that if something does go wrong, that money can be used to get people back?

Lord Adonis: The circumstance which you are discussing is one where an airline had effectively gone bust; so one assumes that these resources would have been used by the time that happened in any event.

Q535 Mr. Eric Martlew (Carlisle): No, you would insist that they actually keep so much money in reserve. This was suggested by easyJet.

Lord Adonis: I think we would regard that as a disproportionate requirement, but any recommendations you choose to make on this area I am happy to look at. The issue where we are looking to move forward, though, is to consult on enhancing the protection available under the ATOL scheme to everything that is reasonably described as a package holiday, because of the experience we had with XL last year, where a proportion of those XL customers were not covered but a reasonable person would regard them as having been on a package holiday.

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Q575 Mr. Eric Martlew (Carlisle): Just on this one, Secretary of State, we have National Express who look like they have failed on the East Coast but they have two other franchises. The idea that you take them away from National Express and re-let them at a better deal than when you did the original franchise is difficult to understand, bearing in mind the circumstances of the recession is it not?

Lord Adonis: At the moment we have an existing contract with National Express for those franchises and unless I exercise powers to cross-default the issue does not arise.

Q576 Mr. Eric Martlew (Carlisle): Exactly, what is the likelihood of getting a better deal now we have a recession?

Lord Adonis: I cannot be sure of that because in fact the franchising market, as we saw with the South Central franchise which we let last month, for new franchises has been a positive one, so I cannot prejudge what deal we might get for new franchises, but as I say at the moment that issue does not arise.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.

On behalf of Eric Martlew, 3 Chatsworth Square Carlisle Cumbria CA1 1HB