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Aviation Consumer Policy Reform - An Adequate Update For The Future of UK Aviation?

Back in 2018, the Department for Transport (DfT) set out some key themes in its "Aviation 2050: The future of UK aviation" consulation. The result was that the government intended to, amongst other things:

  1. take forward new powers for the Secretary of State (delegable to the CAA) to direct that airspace change proposals are taken forward by airports or other relevant bodies

  2. take forward its sanctions and penalties regime proposal

  3. give the CAA the responsibility for enforcing the sanctions and penalties regime.

A little under a month ago, the DfT set out to build on the themes outlined in this consultation, with a new consultation period called "Aviation Consumer Policy Reform". This consultation is focusing on some very relevant issues, such as the impact of the pandemic on the Aviation Industry, as well as the lack of public confidence in flying caused by the pandemic, and subsequently ways to bring back that confidence. In order to ensure the UK is a competitive place for the industry, the consulation is also focusing on the UK's withdrawal from the EU, the opportunities this provides to scrutinise and develop retained EU legislation and case law, and especially the compensation regime for delayed and cancelled flights (known as Regulation (EC) No 261/2004 ("EU261")) and what what can be done to create a fairer model which can be applicable to domestic flights. The aim, it seems, is to try and introduce a compensation scheme which is more akin to those in operation in the Maritime and Rail industries, thus moving away from the 'set rate' model currently used. Summarising the key points from the consulation thus far, and what can be expected from it in the future, it seems that the following is being especially focused on and given its due weight.

1) Accessiblity of Air Travel

Wheelchairs and mobility equipment are currently defined as 'baggage' under the Montreal Convention 1999. The effects of this is that in the event of damage, destruction or loss of the mobility equipment or wheelchair, unless a special declaration of interest is made, the amount of comepnsation which can be paid is severly limited (thus treating these vital pieces of equipment as nothing more than disposable luggage. Of course, this is highly offensive and distressing for many disabled people and acts as a disincentive to travel. Moreover, this equipment is often very expensive and customised to the user, making it very time consuming and difficult to replace, the reality of which means that disabled people often do not want to risk air travel for fear of their equipment being treated as 'baggage'. Lastly, it is worth noting that sometimes there are extraordinary additional costs for disabled people to pay when travelling by air, which further complicates the matter and acts as an additional barrier for many. The DfT has said that it aims to change this, endeavouring to mirror countries such as Canada, where if a mobility aid is damaged, lost or destroyed during transport the airline must (without delay and at their own expense) provide a temporary replacement, reimburse or arrange for damage to be repaired, or replace the aid. Furthermore, they must reimburse any expenses incurred as a result of the mobility aid being lost, damaged or destroyed. This advancement is absolutely vital for the UK, as currently many disabled people still feel like second-class citizens, often being ignored by the government and by organisations, especially when asking for adaptations and developments so that they too can enjoy the same freedoms that able-bodied people can.

2) Handling Passenger Disputes Better

The system for dealing with passenger disputes is currently very limited. Ordinarily, a voluntary Alternative Dispute Resolution ("ADR") scheme exists whereby airlines can elect to engage with passengers in ADR. If an airline is not a member of an ADR scheme in the UK, an individual has limited options to seek redress from the airline, with court action far too often being the only option. Of course, this is often very expensive, time-consuming and of greater inconvenience to passengers. As such, the consultation is seeking the views of stakeholders regarding whether a CAA-approved mandatory ADR scheme should be implemented, so that every single airline flying in, around and/or out of the UK will be adequately armed to effectively and fairly deal with customer disputes. This, and I feel this goes without saying but I shall anyway, would be in addition to any non-UK based schemes that airlines may be involved with. The DfT has also put forward proposals that an ombudsman service be appointed to oversee passenger disputes, in case the former idea is not agreed with by the stakeholders.

3) A More Effective and Efficient Compensation Scheme

As previously mentioned, the UK has retained the 'set rate' model, provided for by Regulation (EC) No 261/2004, through the Air Passenger Rights and Air Travel Organisers' Licensing (Amendment) (EU Exit) Regulations 2019 ("UK261"). However, the DfT is now seeking stakeholders views regarding the idea of moving away from this onto a new module which takes several variables into account, in order to provide a fairer level of compensation. This proposed model would take into account; (a) the length of flight delay (with varying compensation based on an increasing percentage for 1, 2 and over 3 hour delays, and also based on whether it is a domestic or international flight); and (b) the actual ticket price. This last section is the opposite of the current legislation, which provides for fixed rate compensation to be payable (subject to an exceptional circumstances defence) for delays over 3 hours only and irrespective of the ticket price. The DfT has also acknowledged that the current system has not kept up with the growth in low-cost airlines, and is not representative of the costs of travel.

4) Regulatory Reforms and Greater Powers of Enforcement

Part 8 of the Enterprise Act 2002 is the source for the powers currently available to the CAA and CMA in respect of enforcement and regulation. These powers has resulted in a system which is not only restrictive regarding what each organisation is allowed to do, but also has the side-effect of being extremely costly, time-consuming, inconvenient, and also extremely burdensome for the CMA, as they have to take enforcement action against airlines which breach consumer law, as the CAA hasn't the power to do it themselves. Under the new proposals, the CMA and CAA would have many additional powers, including the ability to:

  1. decide if an aviation business has breached consumer rights law;

  2. make directions to end or prevent future infringements by airlines;

  3. order compensation for consumers or other redress for breaches by airlines; and

  4. impose financial penalties (including fines based on turnvoer) on airlines, where appropriate.

If these proposals were to be agreed on, it would finally strengthen the CAA's abilities, which has been needed for a long time now, but until now had been largely ignored. It would allow the CAA to enforce consumer law without the need of the CMA, enhance the protection provided for customers, reduce time and money spent on enforcement, as the process would be streamlined and dealt with 'in-house' without the need for the CMA to get involved, and would have the benefit of providing a better incentive for airlines to co-operate and be more mindful of their actions.

It remains to be seen if these proposals will get very far, and of course a lot swings on how the stakeholders view the options available to them. However, with the EU withdrawal, Covid, a move towards being more mindful regarding beine environmental, inclusive and generally altruistic by society in general, it would seem awfully strange (and would be a grave error in my opinion) if these proposals were to fail. The consultation will run until 11.45pm on the 27th March 2022, and hopefully soon afterwards we will know the position of the UK in the Aviation Industry going forward. Let us just hope that the right decision is made!

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