Posted on: 05 May 2010 by Ross McSweeny
Durham Tees Valley Airport has won a judgement in the UK Court of Appeal against bmibaby relating to bmibaby’s withdrawal of all air services from the airport in 2006.
In 2004, the airport recalls, bmibaby signed an agreement with Durham Tees Valley Airport (part of the Peel Airports Group) requiring it to base and operate two aircraft at the airport for a period of ten years. However in late 2006 the airline withdrew both aircraft from the airport to redeploy them at other UK airports and subsequently cancelled all services “without warning and without agreeing with the airport any terms for its departure”.
The airport company instigated a claim for breach of contract against the airline claiming damages for lost income it would have received for the remainder of the agreement.
At the UK High Court in March 2009, Judge Nigel Davis expressed sympathy with Durham Tees Valley Airport, but ruled the contract too uncertain to enable him to award damages to the airport because the contract did not contain any provisions detailing how many times each aircraft had to fly each day or to which destinations.
Durham Tees Valley Airport was granted leave to appeal as it argued routes, destinations and frequency of flying were matters left to the airline’s discretion but their absence should not prevent a Court from determining damages to which the airport company felt entitled.
A Court of Appeal panel has agreed with the airport company and confirmed that bmibaby was in breach of contract in withdrawing all services in the way it did and as such damages should be awarded to the airport company. The Court indicated that the measure of damages should be the money the airport would have received had the airline remained and operated its normal services for the remaining eight years of the contract.
If the parties now can’t agree on the level of damages bmibaby must pay to the Airport, the Court will determine the sum itself in a further hearing.