Consumers: Low-Cost Flight Information

My Lords, I am sure that it is not only in your Lordships' House but outside it that many will be gratified by the noble Lord, Lord Mitchell, securing this debate to draw attention to the problems of what are described in the Question as low-cost airlines but are probably more correctly described as no-frills flyers. They are no longer low-cost for many people, which is the issue that I want to focus on. As the noble Lord, Lord Black of Brentwood, indicated, the advent of these no-frills flyers introduced many people to the opportunity to go to places that they had not been to before, or had been to and wanted to return to much more frequently than they could previously afford. On the face of it, this is an excellent thing; it is the democratising of airspace in many ways. However, it has led to many unexpected, untoward and, in some cases, counterproductive effects for people. First, it meant that many more people flew. For those who are concerned about the environment, this was not entirely a positive outcome. Indeed, one of the results was increased pressure on the Government to raise the taxation of all airlines to deal with the fact that more people were flying, and it would be a good idea to reduce the number though taxation for the environment's sake. However, the consequences went much further than this. The airlines were able to operate as low-cost in the first few years because they started off paying their staff much less than the established airlines did. They had smaller fleets and when they enlarged them they kept to the same models of aircraft which were much cheaper for them to service and replace than the traditional airlines. However, when it became clear that, even with these benefits, it was not possible for them to keep their low prices, they tried to keep the reputation for low prices by the headline price being low and all the other additions being added in. One could look at that as a simple, tactical sales device—outlined by the noble Lord, Lord Mitchell, so elegantly and in such detail that there is no need for[ me to go into it in great detail—but the purpose of the whole exercise is effectively to continue to deceive the population into thinking that these are low-cost flights when in truth that is no longer what they are. All sorts of things that one would deem to be the proper costs of any operator and that have been described by the noble Lord—their insurance, their administration, the provision of boarding cards and so on—were separated out as though somehow these were other charges. The idea that was put about by Michael O'Leary and others was that, in order to enable more people to be able to afford to fly, people should not have to pay for things that were only in the interests of some of the fliers. For example, if you do not want to bring many suitcases with you, why should you pay a large amount for those who are? That seemed like a noble argument—that everyone should have the possibility of flying without paying for things they did not want and that only some people would want. In fact, as has been demonstrated in this debate, that is not where we are now. It became more and more an operation of deceit which reflected a culture which had developed with some, but by no means all, of the no-frills flyers. I became aware of this culture when I took a Ryanair flight—something I did not make a habit of doing before and made a determined effort never to do again—to France with my wife. Unfortunately, during the short time we were there we had an accident and she was unable to walk to the plane when we got back. She needed to have a wheelchair to take her to the plane. We never suspected that it would not be possible to get a wheelchair without booking in advance and paying for it, but that was absolutely the position of Ryanair. When we subsequently checked we could find no other airline in the world that was charging people for the use of a wheelchair, but that was the Ryanair position. When it was challenged—not by us, but by others—at a European level, the company lost but they found another way of putting a charge on: 50p for everyone to pay for the disabled. To me, the issue was not that precise problem, though it was of itself significant; it was what it represented about the culture that had developed in Ryanair. It was not a culture that was concerned to democratise airspace—that had a feeling that ordinary people ought to have the chance to travel more, enjoy more holidays and see more of the world. It was a dishonest and uncaring culture for people who were simply seen as milch cows to be treated very much as milch cows and herded through in as large numbers as possible. People find themselves in increasing difficulty because they started by believing that they could fly to Perugia or wherever and could get themselves an inexpensive home. That would mean they would continue to have to fly there and it became increasingly problematic for many of these people to maintain themselves. Added to this is the fact that, in many places, this is the only way to get to that particular area. Most of the airports subsidise Mr O'Leary. He actually asks to be paid to fly to their airports while most UK operators find they have to pay the British Airports Authority and others in order to maintain a service. When a local authority that pays Mr O'Leary the subsidy says it is not in a position to pay any more he simply, at the drop of a hat, stops flights to that area and all the people who have become dependent on those flights find that it is impossible for them to continue. That is just part of the culture which has developed. One might say that it is up to people to watch out for themselves and that this is just one airline or a small number of them. This is not so. When you introduce this kind of commercial practice it becomes increasingly difficult for other airlines to function without adopting similar practices. This was the problem in the banking world. I remember asking the chairman of one bank if it was really the case that most of the people on the board of the bank understood the complex instruments that were now being used in banking. He laughed and said that hardly a single one had the remotest idea. All they knew was that the other banks were doing this and making a profit so they had no alternative but to go down that road or lose custom. That is what has happened in the airline industry, not only in the way of charging but also in the way of treating the customers. It is not just a question that the buyer should beware. The whole airline industry has been adversely affected by this negative, disrespectful way of treating customers which cannot be sustained economically without all the complaints and difficulties which have already been referred to. It is serious, because it is like a virus which pervades things and deteriorates them, and that is exactly what has been done. It becomes very difficult to reverse the process unless there are some regulations or pressures that require operators to behave in a different way. Here is where government comes in. I have some questions for the Minister. Which? submitted an OFT super-complaint on credit and debit card charges in March 2011, leading to a promise from HMG just before Christmas last year that the Treasury would ban excessive card surcharges by the end of 2012, with a consultation in the early part of this year. On 8 February, the Financial Secretary to the Treasury, Mark Hoban MP, said: "““We have brought forward legislation to tackle excessive and opaque card charges with the aim of banning above-cost surcharges from mid-2014””." I am glad it is moving ahead, but it seems to have slipped by 18 months over the period of the consultation. Why has this delay arisen? It would be perfectly possible for the Government to press the airline operators—not just Ryanair—to differentiate out clearly those elements of their charges which are properly being paid to Governments as a tax from lots of other things that they describe as levies, surcharges and fees and which they bunch in as though they were being imposed on the airlines by the Government and other authorities. It is actually just a deceit because they are part of their own essential operating costs that would be absorbed by any other business. Is it possible for the Government to ensure a degree of transparency, clarity and honesty in these charges?