Memorandum submitted by TUI UK
TUI UK is the UK's largest holiday company,
with a turnover of £2.3 billion and includes the leading
UK brand of Thomson Holidays. TUI UK is owned by TUI NE which
employs around 13,000 people in the UK, 9,000 of whom work overseas
in around 40 holiday destinations around the world. TUI UK is
the market leader in the UK inclusive holiday market, a position
it has held since 1974.
TUI NE also owns and operates Thomsonfly, the
UK's largest charter airline carrying approximately five million
UK originating passengers out of 28 UK airports to 87 overseas
destinations. Thomsonfly operates a growing mix of charter and
scheduled flying and operates a fleet of 43 Boeing aircraft.
TUI NE is also part of the wider TUI AG group.
TUI AG is the largest tourism group in Europe and operates seven
airlines out of six member states with a total of 122 aircraft
as of 1 October 2005. With this experience of other National Air
Authorities, Thomsonfly believes we are in a good position to
comment on the UK CAA when compared with other NAA's around Europe.
As TUI UK[NE] we interact with the CAA in the
Economic Regulation Group (ERG) and the Consumer Protection Group
(CPG). Thomsonfly, TUI UK's in-house airline also has a high level
of interaction with the Safety Regulation Group (SRG).
We will attempt to answer the main areas of
concern to the committee as set out by the press notice but will
also devote sections of this response to practical examples of
where we believe there could be over regulation and what action
we believe should be taken.
GENERALISED COMMENTS
1. TUI UK understands and supports the role
of the CAA and agrees that regulation to ensure safety is a necessary
requirement of having a safe aviation industry. However we believe
that over regulation does not assist air carriers or tour operators
and in some cases over regulation has limited the effectiveness
and competitiveness of the UK travel industry. The argument that
heavy and over regulation from the UK CAA makes it safer and therefore
better than any other national air authority is unfounded and
costly to UK aviation industry.
2. There is very little consultation with
industry within SRG. Currently the CAA tends to issue rules and
recommendations with minimal consultation with the airline industry
and Thomsonfly would recommend a review designed aimed at enhancing
the ability of industry to provide comments on proposed and implemented
amendments, whilst guaranteeing the CAA is following the recognised
procedures for a pan European approach. The current system of
asking the operator's technical group is not sufficient and a
wider consultative forum with both the industry and other European
NAA's should be investigated. Thomsonfly believes it is a matter
of urgency that a requirement for an effective comment response
system is introduced for all CAA additional regulatory requirements.
3. The SRG also needs to be more transparent.
It is often hard to get the correct information and Thomsonfly
believes the CAA should provide a Help Desk for guidance on all
regulatory matters.
4. The CAA in its entirety should also accept
electronic documentation. ie permits to fly should be acceptable
as digital documents through email services. The CAA website also
needs a full review, updating and modernisation as a matter of
urgency.
REMIT, STRUCTURE,
AND POWERS
OF THE
CAA
5. TUI UK accepts that the CAA was set up
to regulate UK air transport, air navigation and operation of
aerodromes but would remind the committee that, with the creation
and inception of EASA (European Aviation Safety Administration),
the CAA's role has moved to that of a compliance monitor and not
of a direct regulator and this change should be reflected in a
reassessment of the powers of the CAA to add additional requirements
onto recognised EASA operational regulation. It is felt by Thomsonfly
that the CAA interpretation of EASA requirements tends to be too
restrictive and leads to an unnecessarily heavy administrative
burden on operators where resources may be better focused on other
airworthiness activities eg the present RIE and permit to fly
FODCOMS 16-2000 and 28-2005. Thomsonfly would recommend that the
CAA should decrease the number of requirements unique to the UK
and level the field with the rest of EASA's member states.
6. It is also worth noting at this point
that the vast majority of the CAA is a nine to five organisation
and our operations are 24/7. It is essential to ensure smooth
operations that we can be guaranteed swift effective assistance
from the CAA. Having to wait until the next working day for CAA
approval to ferry a slightly damaged aircraft to our maintenance
facilities for repair when we know the aircraft manufacturer has
been made technically aware of the scope of the damage and our
trained and qualified engineers have inspected the aircraft incurs
extra cost and is an unnecessary extra layer of regulation that
penalises the UK aviation industry.
7. However, conflicting with paragraph 6,
some parts of SRG are, or appear to operate on, a 24/7 basis.
The Aircraft Registration department in Kingsway is unrivalled
when compared to other NAA's Thomsonfly has dealt with and we
believe it is possible to register an aircraft in the UK at any
time of day or night and their service is excellent. With this
as an example we would suggest Out of Office hours are required
for Permits to fly and Concessions.
THE EFFECTIVENESS
AND EFFICIENCY
OF THE
CAA
8. As mentioned previously the difference
between EASA's power as a regulator and the CAA as a compliance
monitor and enforcer of these regulations should be clarified.
The CAA can no longer conduct rule making committees and subcontract
to third parties to assist with extra regulation committees. In
this same way the CAA should no longer contract third party organisations
to carry out studies in preparation for new regulation as this
work must now be authorised and requested by EASA.
9. The CAA has too many modes for dissemination
of their requirements and it is not well defined as to which appertain
to EASA aircraft, eg CAPs, CAAIPS, FODCOMS, Airworthiness Notices,
ORS4, Leaflets, Letters to Operators, CAA Specifications, AILs
and GRs etc Airworthiness Notices have also been withdrawn for
over a year but Thomsonfly are still approached by the CAA with
regards to notices that were implemented several years ago to
see if we have complied. With the inception of EASA and the withdrawal
of Airworthiness Notices, Thomsonfly would argue that this is
another example of the UK CAA over regulating the industry when
compared to other member states. Thomsonfly would also ask that
the CAA provide clear guidance to the industry on what is a rule
and what is a recommendation or best practice.
10. The biggest disadvantage Thomsonfly
suffers under the CAA is the maintenance and operations related
Generic Requirements that remain mandatory under the Air Navigation
Order as laid down in CAP747 for commercial passenger operations.
We still have to comply with minimum seat space GR2 and other
issues such as GR3, which our EU colleagues do not have to follow.
Imposing additional modifications and maintenance tasks that no
other EASA state has to follow makes the transition of aircraft
within the EU more difficult where UK imports are concerned. As
part of our wider group TUI AG, we operate 122 aircraft and the
additional modifications insisted on by the UK adds extra cost
and complication for our pan European group to move these aircraft
onto the UK register if required.
11. The CAA also insists on UK operators
having CAA aircraft, engine and modification log books, which
no other EU country in our experience has required. Again this
is another layer of costs imposed by the UK CAA that the UK industry
has to absorb when compared to other countries.
12. Another abnormality endured by the UK
aviation industry is that the UK CAA still requires the operator
to provide closing actions for defects of incidents, which we
as operators have no control over. Many of Thomsonfly's technical
investigations reveal problems with a part or a manufacturing
process, yet it is the operator who is expected to drive the closure
when really it is beyond our control and the regulator should
put pressure on the manufacturer or the manufacturer's regulator
to address the problem.
13. A further point that should be reviewed
is the CAA scheme of charges. The cost for an initial Certificate
of Airworthiness and an export C of A is based upon the weight
of the aircraft and not the amount of work required or expended
in issuing it. Therefore a 15 year old 737 with a lot of history
and multiple previous operators will be a fraction of the price
of that of a two year old 767 with one previous operator. Thomsonfly
would suggest a scale based on multiples of five years of age
and number of engines fitted as these dictate the extent of work,
not the size of the fuselage.
THE EFFECTIVENESS
AND EFFICIENCY
OF THE
CAA IN THE
GENERAL DISCHARGE
OF ITS
DUTIES
14. Several areas of the CAA work well.
ERG in particular is one area where improvement over the last
two years has been noticeable. They have effective communication
with stakeholders and are easy to approach and Thomsonfly feels
that ERG regulates with the benefit of the industry in mind.
15. Another area of the CAA that functions
exceptionally well is the engineering personnel licensing division
of SRG. They regulate part 147 of EASA ops and are approachable
and generally provide immediate access to correct people and provide
appropriate guidance when required.
16. As outlined in paragraphs 5 and 8, Thomsonfly
believes the creation of EASA has altered the role of the CAA
and this must be addressed.
17. TUI UK is concerned that when legislation
becomes onerous and appears to have little added airworthiness
value it may lead to situations whereby judgement on items of
airworthy concern within the maintenance environment may not be
recorded in the accepted manner and therefore be hidden from both
CAMO and the authority.
CONSUMER PROTECTION
18. CPG administers the ATOL (Air Travel
Organisers' Licensing) scheme, which was implemented in the 1970s.
The travel market at this time was significantly different to
the current market as there has been massive growth in the no
frills market, with bookings primarily made on line. This growth
has led to customers wanting more flexibility in their travel
arrangements and there is a large growth in booking of individual
holiday components on line or booking dynamic" packages through
travel agents.
19. There are two statutory regimes that
govern financial protection. These are the ATOL regulations (governed
by the CAA) and the EU Package Travel Directive, implemented in
the UK by the 1992 Package Travel Regulations. These two regimes
overlap in places and this causes duplication, confusion and increased
regulatory burden especially in relation to air travel. TUI would
also add that neither of these regulations has been fully updated
to include the changes the Internet has made to the current trading
market. This lack of review has resulted in two pieces of legislation
that add to increased costs of compliance, uncertainty and confusion
in the scope of the regulation.
20. The confusion and discrepancy can be
illustrated by the following example. A seat-only sale by TUI
UK requires protection under the ATOL scheme whereas this is not
required under the Package Travel Directive. Although there is
no difference in a seat-only sold by TUI UK on a Thomsonfly flight
from London Gatwick to Ibiza, when compared to the same flight
operated and sold directly by easyJet, easyJet is not required
to protect this flight under the ATOL Regulations.
21. TUI UK believes it is in the interests
of the consumer that there is an urgent need to ensure the current
regulatory systems are addressed and the Government needs to create
a simple yet coherent compliance system.
22. The unprecedented consumer demand for
no-frill" airline flights and the growth of the internet
as a tool for booking holiday components has led to a dramatic
increase in the number of people travelling without the financial
protection offered by the ATOL scheme administered by the CAA.
23. Furthermore, many tour operators are
increasingly organising their business outside of ATOL in order
to compete with airlines that do not have to pay for ATOL bonding.
As a result of these trends it is likely that the majority of
air travellers will be unprotected in two or three years. CAA
stats show that by 2010 it is estimated that only 22% of UK international
leisure air travellers will be covered by ATOL.
24. Coupled with this is the perception
of protection. Having been protected previously, consumers are
largely unaware that their air travel and holiday arrangements
are not protected and the inherent risks this brings to them.
In a recent survey the majority of respondents believed they would
be covered but CAA stats show only 66% of leisure air travellers
are now covered by ATOLs.
25. This is an issue that needs to be tackled
urgently so that air travellers are not stranded abroad (with
all the extra costs this entails) or left out of pocket if their
airline goes bankrupt. Airline failure occurs regularly and, in
an increasingly volatile sector, no one can accurately predict
who will fail or when.
26. TUI UK believes that the Consumer Protection
Group should be removed from the main CAA body as the CAA has
always been aligned with aviation whereas financial protection
under the Package Travel Regulations also extends to other forms
of transport. This body has the necessary knowledge and understanding
of the industry and could become for example a part of the DTI
as the department responsible for the Package Travel Regulations.
27. An effective single licensing system
should be created using the removed CPG to oversee regulation
for all travel arrangements including those that fall within the
scope of the existing ATOL and Package Travel Regulations. Any
operator that undertakes flight and non-air business (such as
cruises or rail) must comply with the ATOL scheme, be monitored
by the CAA and put in place separate arrangements for non-licensable
bonding with a third party. The compliance costs for tour operators
who have to undertake both air and non-air business, are substantially
increased by having to comply with the two regimes. Although the
CAA are primarily limited to aviation, extending this to cover
all business that falls under the PTD and ATOLS would be a large
step towards deregulation.
28. TUI UK would also recommend that the
Government should revise the obligations under the ATOL scheme
that is regulated by CPG to match those under the Package Travel
Directive. This would constitute a major deregulatory step whilst
ensuring the best consumer protection at the most appropriate
cost.
21 November 2005
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