For the consultation paper, visit www.dft.gov.uk/consultations/open/2010-16

Consultation closes on 7 June 2010

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You will already be aware that Article 23 of EC Regulation 1008/2008 (the Air Services Regulation - ASR) contains some detailed provisions about how air fares and cargo rates should be published (whether on the internet or otherwise).

The Commission wrote a draft Guidance Note about the ASR before it was implemented, which Note contains some detailed advice about Article 23. Even as a draft (which has been recognised by the DfT in paragraph 8 of its Consultation Paper), the Note, whilst not having the force of law, will be at least persuasive and it is therefore worth taking note of it.

Many airlines were the subject of an initiative in 2007 by the OFT (acting under the Enterprise Act 2002) in relation to the inclusion of all non-optional extra charges within the basic cost of an airline ticket.

You should recognise that the provisions introduced in the ASR go some way further than this and require, for example, that, in addition to the final price, at least taxes, airport charges and "other" charges should be separately specified when they have been included in the final fare. The ASR came into effect on 1 November 2008 but airlines have enjoyed a "breather" from enforcement because the DfT are only now putting forward proposals as to the means of enforcement. The proposals themselves are relatively uncontroversial. They aim to match the procedures laid down in the Enterprise Act so that, for example, there is provision for an airline, in order to avoid prosecution, to give an undertaking not to repeat an alleged contravention.

It is proposed that both the OFT and the CAA be nominated as enforcers. "It is expected that the CAA will take the lead in most cases". (See para 24 of the Consultation Paper).

The CAA did, in fact, take the lead in October 2009 by writing to airlines about Article 23 and asking for confirmation that they were aware of the pricing provisions of the ASR and that the airline's website complied with those requirements.

Appeals against aircraft leasing decisions

It is also proposed that a right of appeal will be introduced by way of an amendment of S1 2009/41 which came into force in January 2009 as the UK's initial effort at implementing procedures required by the ASR.

A right of appeal for airlines against a decision to refuse to approve an application to wet lease an aircraft, or to participate in a dry lease, is obviously welcome. It is proposed that the appeal should be to the County Court in England, Wales and Northern Ireland, and to the Sheriff's Court in Scotland. In such an appeal, the court could overturn the DfT (Secretary of State's) decision if satisfied that this was wrong on the evidence. Appeals against decisions on safety grounds taken by a CAA official would be to Board Members of the CAA.

Recommendations

  1. Airlines should review their air fare and cargo rate offerings to ensure that they comply with Article 23 of the ASR.
  2. Airlines should consider whether they are content with the less draconian enforcement procedure contained in the Enterprise Act; and whether it is appropriate that both the OFT and the CAA should be nominated as enforcers.
  3. Airlines should consider whether it is satisfactory that appeals against an adverse CAA decision on leasing should go to the CAA Board Members and/or whether the County Court is the right tribunal to hear appeals from an adverse decision on a lease approval made by the Secretary of State.

If there are points to be made, they should be made by 7 June to the address given in the Consultation Paper.