UK: Injunctions: Maintaining The Dynamic Status Quo

Last Updated: 2 March 2011
Article by James Jordan

On 3 December 2010 Mr Justice Beatson, sitting in the Commercial Court heard application to continue until trial a mandatory injunction obliging an airport operator to accept a carrier's scheduled flights outside airport promulgated operating hours. Limited v Blackpool Airport Ltd (3 December 2010), Queen's Bench Division, Commercial Court

In September 2005 low cost airline Limited (the claimant) entered into a letter of agreement (the Agreement) with Blackpool Airport Limited (BAL) (the defendant). regarding use of the airport. The material provisions of the Agreement provided that the parties would "co-operate and use their best endeavours to promote Jet2's low cost services ... and to provide a cost base that will facilitate Jet2's low cost pricing". As part of the Agreement, both parties agreed a number of charges that would be levied by BAL for services provided to Jet2. Amongst these was a surcharge for aircraft movements outside the promulgated airport operating hours.

Pursuant to the Agreement Jet2 proceeded to operate flights out of Blackpool airport. By 2010 Jet2 had two aircraft based at the airport and expected to carry 180,000 passengers annually. Since the summer of 2006 the carrier regularly scheduled flights outside of the airport's promulgated operating hours. Between 1 November 2009 and 3 November 2010 Jet2 operated 759 flights from or to Blackpool airport of which 20.3 per cent arrived outside the promulgated operating hours.

In May 2008 a subsidiary of Balfour Beatty PLC purchased the majority shareholding in the defendant's parent company. At the time of purchase BAL was operating at a loss, forecast to be Ł4.5 million per annum. The new owners sought to address this by levying a Ł10.00 "Air Development Fee" on each departing passenger. This went some way to reducing operating losses. However, in 2009 Ryanair, the other major airline operating out of Blackpool ceased operations from the airport. Ryanair's departure resulted in a significant fall in passenger numbers. Keen to reverse this position BAL encouraged Jet2 (who had consistently said it intended to increase its capacity), to increase the size of its operation at the airport. BAL in turn continued to accept Jet2's aircraft movements outside of the promulgated hours, although not contractually obliged to do so.

On 19 July 2010 BAL wrote to Jet2 stating that the airport could not continue to incur the then current levels of loss and asked whether the carrier would have the capacity to attract an additional 120,000 departing passengers in 2011. In the same letter, BAL stated that unless profitability improved significantly it would be "... forced to re-gauge the airport's operations". Further, that re-gauging would result in downgrading of radar and traffic control facilities at the airport, "... to a position where [the airport] will no longer be able to maintain any of [Jet2's] operations".

Further letters between the parties and their legal representatives followed. On 22 October 2010 BAL wrote to Jet2 stating that due to "current financial circumstances" BAL would only operate within its published hours of 0700 and 2100. A number of flights in Jet2's winter 2010 schedule had arrival and/or departure times outside of these published operating hours.

No agreement was reached and in a letter dated 29 October 2010 BAL stated that with effect from midnight on that day, it would not accept departures or arrivals scheduled outside its publicised operating hours. BAL also notified Jet2 that the approach radar facilities would be open only between 0900 and 1900. As a result of this, two of Jet2's flights which were due to arrive outside of the promulgated operating hours on the 30 and 31 October 2010 had to divert to Manchester airport.

The injunction

On 4 November 2010 Jet2 applied successfully to Hamblen J sitting in the Commercial Court for an injunction against BAL. By its terms BAL was ordered not to refuse to provide any of the services set out in the Agreement, nor to refuse to provide radar services in a manner equivalent to that provided to Jet2 in the preceding six months.

Jet2 then applied to continue the injunction to trial. At a hearing on 3 December 2010 Mr Justice Beatson concluded that BAL should continue to be subjected to an injunction pending an expedited trial. In coming to this decision Beatson J found that:

  • In light of the dealings between the parties from 2006 the "dynamic status quo" would be maintained by allowing the injunction to continue.
  • This was a case in which not granting the relief sought would cause more harm to the claimant than to the defendant. Jet2 would need to reschedule flights to fit BAL's proposed new operating hours which in turn could lead to flight cancellations or diversions to other airports, whereas, the defendant would only have to maintain the service that it had provided hitherto.
  • Damages would not be an appropriate substitute for the injunction due to the unquantifiable reputational damage that might be occasioned to Jet2 and mindful also of the hardship suffered by passengers if Jet2 had to cancel and/or divert flights from Blackpool airport over the busy Christmas period.
  • Jet2 had a strong arguable case that BAL's change of position involved a breach of contract. Beatson J suggested that ceasing to operate outside of the promulgated hours would go against the terms of the Agreement, "... to provide a cost base that will facilitate Jet2's low cost pricing".

The decision of the Commercial Court to allow the injunction to continue to trial gives some indication as to how the court may treat this case; however, observers will have to wait until the final outcome before any firm legal principles can be established. In the meantime, both airport operators and carriers should be mindful of the possible effect that loosely worded contractual agreements regarding the provision of airport services may have on obligation on their part to provide services outside of promulgated operating hours.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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