Following on from the first in the series of updates on the Modern Transport Bill (now known as the Vehicle Technology and Aviation Bill), Modern Transport Bill boosts electric and hydrogen vehicles, this second update looks at the Aviation provisions dealt with in Part 3 of the Bill.

Read our previous update

The Bill's provisions focus on three main areas, namely:

• Air traffic navigation services;
• The Air Travel Organisers Licence (ATOL) scheme; and
• The offence of shining or directing a laser at a vehicle.

This update touches on changes proposed in each of these areas, and comments on the absence of any proposed measures in respect of drones – a growing industry in the UK that many expected to feature in this Bill.

Air Traffic Navigation Services

The Bill amends much of the regulatory framework governing air traffic navigation services. These services are provided by NATS (En-Route) plc (NERL), pursuant to a licence granted under the Transport Act 2000. Under the terms of this licence, the Civil Aviation Authority (CAA) is responsible for regulating NERL. The CAA has long considered its regulatory powers insufficient, often highlighting its inability to take effective enforcement action against NERL.

Partly in response to CAA pressure the Government issued a consultation in 2016 detailing its proposals for modifying the regulatory framework. The Bill seeks to adopt the conclusions reached following the consultation. The main changes are:

Licence Modification

The Bill adds new sections into the Transport Act 2000 which change how the CAA makes amendments to NERL's licence. The main difference will be that the CAA will no longer need NERL's consent to make any proposed licence changes. The CAA will however still need to consult stakeholders and any affected party will have a right to appeal the change to the Competition and Markets Authority.

Enforcement Powers

The Bill provides the CAA with new and much wider enforcement powers. These include the power to: issue a contravention order; make an urgent enforcement order (which will require NERL to remedy the breach); and impose fines. Civil sanctions will replace criminal sanctions as a potential penalty for failing to provide information regarding any breach to the CAA.

Licence Extension

The Bill also allows the Government to extend the length of NERL's licence term. The current termination period is 10 years. This does not fit well with the 15 year average asset life of NERL investments. The Bill therefore allows Government to extend the term up to 15 years.

Air Travel Organisers Licence (ATOL)

The Bill also makes changes to ATOL. ATOL is a statutory financial protection scheme managed by the CAA, obliging UK providers of flight accommodation to hold an ATOL licence [1]. If an ATOL-licensed firm goes out of business, ATOL will refund protected customers. The ATOL system is one of the ways in which the UK provides protection required under the European Package Travel Directive 1990.

In 2015 the EU introduced a new Package Travel Directive (PTD 2015), which aimed to clarify what constitutes flight accommodation and to harmonise protection within the EU. The Bill aims to ensure compliance with the PTD 2015 and strengthen the ATOL scheme further, whilst providing the Secretary of State with powers to adapt the scheme as appropriate when Britain leaves the EU.

The main change is the extension of the scope of the ATOL scheme so that any business established in the United Kingdom can protect sales across the EU (rather than UK sales only) and comply with the PTD 2015 using ATOL – removing the need to comply with the different insolvency protection rules of other EEA States. The changes are intended to capture more categories of holidays and to make cross-border trade easier for businesses established in the UK through an ATOL scheme that is harmonised with the PTD 2015.

Offence of Shining or Directing a Laser at a Vehicle

The Bill makes it an offence to direct or shine a laser beam at a vehicle in such a way as to dazzle or distract the person driving, piloting or navigating that vehicle.

This offence is not completely new. Under section 225 of the Air Navigation Order 2016, it was an offence to 'dazzle or distract' the pilot of an aircraft and under section 240 it was an offence to 'recklessly or negligently act in a manner likely to endanger an aircraft, or any person in an aircraft'. Many have argued these offences are insufficient as they are limited to aircraft, and are summary offences only which restrict police powers. The new offence therefore applies to all 'Vehicles', which are defined as anything used for travel by land, water or air and so will apply in relation to trains, buses and other forms of transport. The penalties remain the same: a maximum fine and imprisonment for up to 5 years.

However, many still consider the new offence insufficient. A number of organisations and rights groups wanted lasers to be reclassified as offensive weapons when used in some circumstances, particularly following the failure last year of a Private Members Bill which had sought to make the sale of high wattage lasers unlawful in certain circumstances.

Absence of drone provisions

Given many have been calling for drone regulation for some time, it is worth noting that the Bill does not contain any provisions regarding drones. Commentators have called for enhanced drone safety rules in light of an increasing number of near misses between drones and passenger jets and other incidents regarding the misuse of drones. Furthermore, those investing in the drone industry see the availability of a focussed and enhanced regime as key to the development of an emerging, lucrative market in the UK.

Several members of the house have expressed their surprise and concerns about this as the Bill has passed through the House and Committee stage. In the Bill's second reading Andy MacDonald, the Labour Shadow Transport Minister, indicated that Labour would be putting forward an amendment in Committee. On 16 March 2017 MPs MacDonald, Foxcroft and Burton moved an amendment which would have forced the Government to bring forward regulations dealing with UAVs (unmanned aerial vehicles) within 6 months of the Bill receiving Royal Assent. UAVs were defined widely, with no exemptions for drones under a certain weight. Suggested subject material included geofencing, a registration process and a regulatory role for the CAA.

However, during the Bill's second reading, Chris Grayling, Transport Secretary, explained that the Government 'are consulting on a new regime for drones but the measures do not all have to go into primary legislation'. In Committee, MP John Hayes (Minister of State for Transport) reiterated that that 'when the consultation is completed and the Government produce their response this Summer, they will have a chance to consider what further steps, including legislative steps, might need to be taken'. In response to this, the Labour MPs reluctantly withdrew their amendment.

The Government's consultation on the safe use of drones closed on 16 March 2017, meaning their response is due by 15 June 2017, although the General Election will no doubt delay this.

See our Drones Update for more detail on the consultation

The Transport Committee has meanwhile launched an enquiry into the use of drones and is asking for written submissions on:

• The safety and security risks posed by drones, particularly to manned aircraft
• The role of technology in enabling safe and sustainable growth in the civilian drones sector
• The likely effectiveness of key government proposals in its recent consultation, including pilot training and the proposed online registration scheme
• The current enforcement arrangements for misuse of drones in the UK
• Insurance issues and actions needed to create a viable market for drones insurance
• The economic growth potential of the drones industry in the UK and the Government's role in enabling that growth

So it looks like it may be some time before legislation regulating the use of drones gets off the ground, but this is a chance to make sure when it does, it will cover all the key areas.