Jet2.Com Ltd v Blackpool Airport Ltd

This is an application to continue until trial an injunction granted on 4 November by Hamblen J on the claimant’s application made on short notice: see [2010] EWHC 2904 (Comm). The defendant, Blackpool Airport Limited, operates Blackpool airport. It holds a Civil Aviation Authority Public Use Aerodrome Licence that allows flights for the public transport of passengers. The claimant, Jet2.com, is a low cost airline with a fleet of over thirty aircraft operating scheduled flights from eight airports in the United Kingdom, including Blackpool, mainly to European leisure destinations.

The claimant has been operating at Blackpool airport since March 2006 under a contract (“the Letter Agreement”) with the defendant. In May 2008 95% of the shares in the defendant’s holding company were acquired by a subsidiary of Balfour Beatty PLC. At that time the airport was making a substantial operating loss and Balfour Beatty and the management team of the defendant company were understandably anxious to eliminate this loss. Since spring 2010 relations between the claimant and the defendant have deteriorated. The dispute between them concerns the operating hours of the airport and whether the defendant is contractually obliged to accept the claimant’s flights outside its promulgated operating hours. In the winter the promulgated operational hours are 0700 to 2100 hours. In the summer they are 0600 to 2000 hours.

These proceedings were launched after the defendant stated that as from midnight on 29 October 2010 it would not accept departures or arrivals scheduled outside the promulgated operating hours. Two of the claimant’s flights had to be diverted to Manchester and the passengers on those flights and the next outward flights had to be transported by bus between Manchester and Blackpool airports. Notice of the application was given to the defendant at 10:00pm on 3 November and the matter came before Hamblen J on 4 November.

The material parts of the Order made by Hamblen J are:

“2.

Until the Return Date or until further order:

(a)

The defendant whether by itself, its officers, servants or agents or otherwise howsoever must not refuse to provide any of the services set out in paragraph 2(a)(i) (the “Services”) of an agreement in writing between the claimant and the defendant dated 23 September 2005 a copy of which is appended hereto at Appendix 1 (the “Letter Agreement”) in respect of any flights of the claimant from and to Blackpool airport in the claimant’s flight schedules as published on the applicant’s website or as otherwise required by the claimant (the “Claimant’s Flights”) in an equivalent manner [to] which the defendantprovided the Services during the period covering the claimant’s winter 2009 flight schedules as published on the claimant’s website; subject to sub-paragraph (b) below.

(b)

The defendant whether by itself, its officers, servants or agents or otherwise howsoever must not refuse to provide approach radar services in an equivalent manner in which the defendant has provided such services to the applicant in the 6 months preceding the date of this order.

(c)

The claimant and the defendant must not disclose any of the terms of the Letter Agreement save as provided by clause 3 thereto.”

The Letter Agreement dated 23 September 2005 was made between the defendant (“BAL”), City Hopper Airports Ltd and the claimant. It states that it is made “in relation to low cost services from and to Blackpool airport (“BA”)”. Its material provisions are:

“1.

Jet2.com and BAL will co-operate together and use their best endeavours to promote Jet2.com’s low cost services from BA and BAL will use all reasonable endeavours to provide a cost base that will facilitate Jet2.com’s low cost pricing.

Jet2.com proposes…to base one B737-300 aircraft, or its equivalent, at BA from the commencement of the summer operating season, 26 March 2006, and to operate and build its fleet at BA in accordance with demand for an initial period of 15 years from the date of the first service by Jet2.com from BA and the terms set out in this Letter Agreement will, except as otherwise stated, apply for the 15 year period.

…

2.

In consideration of the investment that Jet2.com is making in offering such services from BA, BAL will make available the following pricing and other benefits to Jet2.com in relation to BA:

(a)

(i) BAL will levy airport charges on Jet2.com on the basis of the charging scheme as set out in Appendix A for the initial period of 15 years commencing on the date of Jet2.com’s first flight from BA. These charges include all BAL’s aircraft movement, handling and passenger charges to Jet2.com including landing, navigation, marshalling etc, parking, passenger facilities charges, passenger security charges, security, baggage x-ray and security screening, baggage handling, bussing, CUTE and check-in desk charges.

For the avoidance of doubt, these charges do not include charges for the provision of labour for passenger check-in and boarding supervision as is typically provided by handling agents.

(ii)

In the event of increased terrorist activity resulting in further government-imposed security restrictions, BAL will reserve the right to pass on to Jet2.com any additional costs reasonably incurred by BAL.

…

4.

The terms set out in this Letter Agreement represent the whole agreement between BAL…and Jet2.com in relation to their subject matter and cannot be changed except by a written document signed by all such parties.

5.

In the event of any inconsistency between the terms of this Letter Agreement and the BA Conditions of Use, the terms of this Letter Agreement shall prevail to the extent of that inconsistency. Nothing in this Letter Agreement is to affect the right of Jet2.com to receive from time to time whatever incentives or benefits are provided for in the Conditions of Use, to the extent in any event not provided to Jet2.com pursuant to the terms of this Letter Agreement.”

The defendant thus agreed with the claimant to use its best endeavours to promote the claimant’s low-cost services from Blackpool airport and to use all reasonable endeavours to provide a cost base that would facilitate the claimant’s low-cost pricing. The claimant stated that it proposed to commence a service between Belfast and Blackpool airport, to base one Boeing 737-300 aircraft at Blackpool from the summer 2006 operating season and to operate and build its fleet at Blackpool airport in accordance with demand for “an initial period of 15 years”. The agreement also states that the term of the agreement “will, except as otherwise stated, apply for the 15 year period”.

Clause 2 refers to a charging scheme in Appendix A. Appendix A states that the charging scheme “is inclusive of all BAL’s actual charges relating to aircraft operations, including all passenger related charges as described in clauses 1 and 2 of the letter agreement”. Appendix A also provides for a flat charge per departing passenger for years 1-3 and an increased charge per departing passenger in years 4-15 inclusive except for certain services to destinations in the United Kingdom and Eire for which the lower per passenger charge would apply throughout the 15 years.

By clause 3 the defendant and the claimant agreed not to disclose any term of the agreement and to ensure that none of their officers or employees disclosed any term “except when necessary for a proper purpose to a competent authority (such as a national or municipal government body or agency); to a court of law or in any legal proceeding; to the senior management of a party or its parent undertaking or its ultimate parent undertaking, to the auditors of or any lawyer or professional person acting for a party, its parent or ultimate parent, or to a prospective purchaser”. In the case of disclosure to a purchaser disclosure was only permitted following “prior written consent from the other parties” such consent not to be unreasonably withheld or delayed.

The defendant’s standard conditions of use provide that the use of the airport facilities are subject to local flying restrictions and procedures published from time to time in the UK Air Pilot and NOTAMS (“Notice to Airmen”) and any orders, instructions or directions given by or on behalf of the defendant. They also provide that the operator shall pay the appropriate charges for landing, parking or housing. The charges are in a schedule. It provides for standard landing fees and states that surcharges apply for movements outside promulgated airport hours. There are two rates, one for movements between 2100 and 2200 hours and a higher one for movements between 2201 and 0700 hours. Paragraph 2 of the conditions of use also provides that use of the airport is subject to inter alia NOTAMS and any order, construction or direction given by or on behalf of relevant government departments.

The regulatory framework within which the defendant operates Blackpool airport is contained in the Air Navigation Order 2005 SI 2005 No 1970 (“the 2005 Order”). The Civil Aviation Authority (“CAA”) granted the defendant a Public Use Operations Licence in respect of the airport. The terms of the Licence reflect Articles 126(1)(a), 128(1)(b) and 128(3)(b) of the 2005 Order. The holder of a Public Use Operations Licence is required to notify the hours during which the aerodrome is to be generally available for take-off or landing and whether the airport is to be available by arrangement with the licensee outside these times: Licence Condition 7 and Article 128(3)(b). Condition 7 also states that the airport “shall not be used for the take-off or landing of aircraft at any other time unless [the CAA] has been notified in accordance with such information as being available for use by arrangement with the licence holder outside the times when it is generally available and is used pursuant to such arrangement”.

The operator is required to make the aerodrome available to all persons on equal terms when it is available for the take-off or landing: see Licence Condition 1 and Article 128(2). Moreover, by Article 128(4) a licence holder “shall not contravene or cause or permit to be contravened any condition of the aerodrome licence” in relation to specified flights which include flights for the purpose of the public transport of passengers.

The evidence on behalf of the claimant consists of two statements of Philip Meeson, the claimant’s Chief Executive, respectively dated 4 and 17 November 2010 and a draft statement of Paul Whelan. Mr Whelan was Chief Executive of City Hopper Airports in 2005 and negotiated the agreement with the claimants. Mr Shepherd stated that Mr Whelan approved the terms of his statement but, because he was out of the country and unavailable, a signed copy was not before the court. No point was raised about this by Mr Crane.

The evidence on behalf of the defendant is contained in statements by: John Spooner, a non-executive director of the defendant since 2007; Stuart Orrell, a director of Balfour Beatty Capital Ltd, who was involved since Balfour Beatty acquired its interest in the defendant’s parent company; Paul Rankin, the defendant’s Airport Director since January 2010; and Christopher Stock, the Operations Manager of Marshall Airport Services in Cambridge, all made on 12 November. Mr Stock’s statement deals with the impact of out of hours aircraft flights on rostering and whether commercial aircraft can operate when the Approach Radar Service is not available.

The claimant has provided flights in and out of Blackpool airport for four and a half years since it entered into the Letter Agreement in September 2005. It now has two aircraft based at the airport and expects to carry some 180,000 passengers to and from it in 2010: Mr Meeson, second statement, paragraph 53.

In the past the claimant has operated outside the airport’s promulgated operational hours. The first such flight was in the summer of 2006: see Mr Meeson’s first statement, paragraph 28. Since then there have been flights scheduled outside the promulgated opening hours in all schedules except for those for the winters of 2006 and 2010. Mr Meeson’s evidence (second statement, paragraph 26) is that between 1 November 2009 and 3 November 2010 the claimant operated 759 flights from or to Blackpool airport of which 154 (20.3%) arrived outside the promulgated operating hours. Of those, 95 (12.5%) of the flights were scheduled to arrive outside the promulgated hours and 59 (7.8%) were scheduled to arrive within those hours but arrived later. Ryanair and Monarch also operated flights outside the promulgated hours: Mr Meeson, second statement, paragraph 29.

The claimant’s winter 2010-11 flights have been on sale since publication of its schedule in December 2009. As originally promulgated the 2010 winter schedule did not include flights outside the promulgated hours. On 8 October 2010 this schedule was amended to include a flight departing at 0600 and one arriving at 2315 from 21 December until the end of the Christmas and New Year period. There are also twice weekly services to Alicante and from Tenerife which respectively take off at 0600 and arrive at 2315: Mr Rankin’s statement, paragraphs 74 and 76.

In May 2008 Regional and City Airports (Blackpool) Holdings Limited, a subsidiary of Balfour Beatty PLC purchased 95% of the shares in the defendant’s parent company from City Hopper Airports. At that stage (see Mr Orrell’s statement, paragraph 10) the airport was forecasted to make an operating loss of some £4.5 million per annum. In November 2008 the defendant introduced an “Airport Development Fee”. £10.00 was levied on each departing passenger. Ryanair, the other major airline operating out of Blackpool ceased operating at the airport at the beginning of 2009 because (see Mr Spooner’s statement, paragraph 16) of the introduction of the Air Development Fee. Since the departure of Ryanair at the beginning of 2009 the claimant has been the biggest user of Blackpool airport.

Mr Meeson’s evidence (first statement, paragraph 11) is that the claimant has made a substantial investment in setting up its base at the airport. This has included acquiring aircraft to base there, hiring flight and cabin crew, tailoring its schedules to meet local demand, acquiring slots at destination airports and entering into contracts with third parties at such destination airports. Mr Meeson’s evidence (first statement, paragraph 12(a)) is that in 2009 the claimant’s profit attributable to Blackpool airport was about £2 million.

In 2008 some 439,000 passengers flew from or to Blackpool Airport. In 2009, after Ryanair ceased to operate at the airport, passenger numbers fell to 277,000: Mr Meeson, second statement, paragraphs 44-45. Although the operating losses have fallen since Balfour Beatty acquired the airport, it is currently losing about £2.25 million per annum. The defendant was understandably concerned to increase passenger numbers and has sought to encourage the claimant significantly to increase its passenger numbers: see, e.g., Mr Rankin, paragraphs 26 and 36; Mr Orrell, paragraphs 15-16, and Mr Spooner, paragraph 12. The defendant’s case is that the reason it continued to accept aircraft movements outside the promulgated hours although it was not obliged to was that the claimant had consistently told it that it intended to increase its capacity at the airport and in particular to add an additional aircraft to the two based at the airport.

The defendant’s witnesses state that airlines are in a strong bargaining position vis a vis airports. The claimant appears to have used this to ask the defendant to increase its expenditure on marketing. At various times it made veiled and less veiled threats to stop operating from Blackpool if the defendant did not do so. This is seen in Mr Meeson’s email to the defendant dated 12 March 2009 stating “aeroplanes are moveable. They can leave as easily as they can arrive”. It is also seen in the file note of a meeting between the parties on 22 January 2010 which states “threat put the aircraft with East Midlands or Belfast?!” and in notes from a meeting on 8 July 2010 when Mr Doubtfire, the claimant’s managing director, mentioned moving an aircraft to Manchester if Blackpool was unprofitable.

In a letter dated 19 July 2010 Mr Rankin stated the defendant was unable to allow the airport to incur the current levels of loss. The letter stated that the defendant needed to increase the number of departing passengers by 220,000 to 250,000 if it was to break even. It asked whether the claimant might be able to increase its capacity sufficiently to attract an additional 120,000 departing passengers in 2011. It also stated that unless there was a significantly improved level of profitability it would “be forced to re-gauge the airport’s operations”. Although Mr Rankin’s evidence (paragraph 34) is that this would not have prohibited the claimant using the airport, what his letter stated was the re-gauging would result in downgrading of radar and air traffic control facilities, “to a position where [the airport] will no longer be able to maintain any of [the claimant’s] operations”. His explanation for the language was that it was intended to put pressure on the claimant. Mr Meeson and Bird and Bird, the claimant’s solicitors, replied stating that such action would put the defendant in breach of the Letter Agreement.

In September, the defendant decided that it would strictly enforce what it considered to be the terms of the contract with the claimant, in particular with regard to hours of operation: see the statements of Mr Orrell (paragraph 35) and Mr Spooner (paragraph 28).

On 8 October Mr Rankin wrote three letters to the claimants and their solicitors. The letters to Mr Meeson and Bird and Bird stated the defendant did not intend to take any steps which would have a negative effect on the claimant’s operations. The third letter to Mr Doubtfire, the claimant’s Managing Director, however, indicated measures which would certainly have an adverse effect on the claimant but which the defendant considered it was entitled to take. These concerned ground handling services which the defendant had provided since 2007 and charges for other services. The defendant served notice that it was terminating the ground handling agreement and withdrawing ground handling services from midnight on 8 December 2010. It also gave notice that it was increasing charges for security, car parking for staff, staff security passes, and in respect of passengers with reduced mobility. None of these items had been the subject of charges in the time since March 2006 when the claimant started operating at the airport. Bird and Bird’s response asked whether these additional charges had been levied on other airlines.

On 17 October, as a result of accommodating one of the claimant’s aircraft after 2100 hours, the airport had to close for two hours during normal operating hours to comply with CAA restrictions on the working hours of air traffic control offices: Mr Rankin, paragraph 55.

The next significant development was a letter dated 22 October 2010. In this the defendant acknowledged that “historically, Jet2.com has scheduled flights outside of [the airport’s] operating hours” but stated that “current financial circumstances” had caused it to take steps to manage the airport as effectively and efficiently as possible. The letter stated that it would only operate within the airport’s published hours which were 0700-2100, and stated that, if the claimant agreed to amend its schedule to remove flights outside those hours as “a gesture of goodwill” it would continue to accept such flights until 23 November. If the claimants did not agree the “goodwill gesture” would be withdrawn and no flights outside the “operating hours” would be accepted after Friday 29 October.

There was no agreement, and in a letter dated 29 October the defendant stated that its offer had lapsed and, with effect from midnight on that day, it would not plan to accept departures or arrivals scheduled outside its published operating hours. This had the effect to which I have referred. Two flights which were due to arrive on 30 October at 2355 and 31 October at 2320 hours from Faro and Alicante had to be diverted to Manchester. Some 321 passengers had to be bussed between Blackpool and Manchester airports.

In the period between January 2007 and 29 October 2010 the evidence is that 28 of the claimant’s aircraft were diverted from Blackpool to other airports, i.e. seven a year. Mr Meeson states (second statement, paragraph 27) that the reasons were primarily weather related (11 diversions) or lateness (12 diversions). Three diversions were due to unspecified operational reasons, one due to an air traffic control strike, and one due to lack of fire cover at the airport.

On 31 October the claimant received a NOTAM dated 1 November from the defendant. This stated that the approach radar facilities would be open only between 0900 – 1900. Mr Meeson’s evidence at the hearing before Hamblen J was that the claimant thought that the effect of this was to restrict the hours in which its aircraft could take off or land to 0900 to 1900: see first statement, paragraphs 23-25. In fact (see Mr Stock’s evidence) this is not so and a lawful and safe air traffic control service can be provided without approach radar, albeit subject to some limitations. Morover, the terms of the 1 November NOTAM were identical to the previous applicable NOTAM save that the hours had changed from British Summer Time to GMT. Mr Meeson’s explanation (second statement, paragraphs 5-7) is that he had forgotten about the previous NOTAM. When it was received there was no issue between the parties as to the acceptance of the claimant’s flights. But he received the recent NOTAM following the diversion of the two flights which he regarded as an escalation of what he described as “the campaign” by the defendant against the claimant. Because of this he forgot about the earlier NOTAM and made a mistake. Mr Meeson’s reaction to what was a normal communication and in substance a continuation of the status quo shows the extent of the mistrust between the parties but also suggests ignorance or at best a superficial knowledge of the effect of withdrawing approach radar facilities.

The first question is how one characterises the issue between the parties. There are a number of limbs to the dispute including the provision of various services specified in the Letter Agreement. At its core, however, is the question of whether the defendant is obliged to keep the airport open and accommodate the claimant’s flights outside the promulgated hours, and if so the extent of that obligation.

Mr Crane QC submitted (see skeleton argument, paragraph 3) that “the essential dispute between the parties…is not so much as to the scope or nature of the facilities covered by the Letter Agreement but as to whether the Airport is obliged to remain open and operational continuously so as to accommodate and service the Airline’s flights at whatever hours the Airline sees fit to schedule (and re-schedule) them”.

Mr Shepherd QC submitted (see skeleton argument, paragraphs 80-81) that clause 1 of the agreement is concerned with the claimant’s scheduled operations and are its “object” in requiring the defendant’s best endeavours to promote its low cost services and its reasonable endeavours to provide a cost base that will facilitate the claimant’s low cost pricing. He submitted that “restricting hours of operation accordingly strike[s] at the central obligation undertaken by the defendant”.

The issue is not in fact as stark as the pleadings and these submissions suggest. The evidence on behalf of the claimant put before the court is not that the defendant is obliged to keep the airport open on a 24 hour basis. It is that the agreement is for the airport to accommodate flight movements between 0700 and 2359 hours and, between 0000 and 0659 hours the agreement is for the defendant to do its best to accommodate them: see Mr Meeson’s second statement, paragraph 16 and see also his first statement, paragraph 28.

The defendant’s case is that it is not arguable either as a matter of the construction of the contract or as an estoppel by convention that the airport is obliged to remain open to meet the claimant’s schedules. Mr Crane submitted this is because, on the well-known principles set out, for example, in Yewbelle Ltd v London Green Developments Ltd [2007] EWCA Civ 475 at [29] and [33] and the recent decision of the Court of Session in EDI Central Ltd v National Car Parks Ltd [2010] CSOH 141 at [19] – [20] an obligation to use “best endeavours” or “all reasonable endeavours” does not require a party to act in a way which is contrary to its commercial interests. Accordingly, he submitted that either on the “is there a serious issue to be tried” test or the “high degree of assurance” test formulated by Megarry J in Shepherd Homes Ltd v Sandam [1971] Ch 340 at [351] which he submitted was appropriate in the circumstances of this case because of the mandatory form of the relief sought, the claimant does not satisfy the requirements for interlocutory relief. As to the claimant’s case based on estoppel by convention, he submitted that the mutual dealings alleged by the claimant do not support the estoppel asserted and, in any event the estoppel asserted is precluded by the “no variation” provision in clause 4 of the Letter Agreement.

The next question is whether, in the light of the mandatory form of the relief sought, the test should be a “high degree of assurance” that at the trial it will appear that the injunction was rightly granted. Although drafted in prohibitory language, the true nature of the injunction granted by Hamblen J is mandatory. However, as Lord Hoffmann stated in National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] UKPC 16 at [21], asking whether an injunction should be classified as prohibitive or mandatory “does not do justice to the complexity of a decision as to whether or not to grant an interlocutory injunction” and ([20]) “what matters is what the practical consequences of the actual injunction are likely to be”. Mandatory injunctions are in their nature likely to be more intrusive and more difficult to formulate with precision. This is a factor which Mr Crane dealt with as part of his submissions on the balance of convenience and to which I shall return. But what is important in considering whether the “high degree of assurance” test should apply is whether granting an interlocutory injunction is likely to cause irremediable prejudice to a defendant if it turns out at trial that it should not have been granted: see National Commercial Bank Jamaica Ltd v Olint Corporation Ltd at [19].

Moreover, in Film Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670 at [681] Hoffmann J, in the context of his discussion of Megarry J’s judgment in Shepherd Homes Ltd v Sandam,stated that “there is sometimes a sense in which a mandatory injunction is needed to preserve the status quo”. He stated that “injunctions which although negative in form require a person to continue to provide a service can be seen as preserving what might (at some risk of oxymoron) be called a “dynamic status quo” which consists in” the continued provision of the service. Hoffmann J illustrated this by reference to injunctions in charter-party withdrawal cases which restrain the owner from using the ship otherwise than in accordance with the terms of the charter. He also observed that in some cases, which he described as exceptional, “withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a “high degree of assurance” about the plaintiff’s chances of establishing his right”. He gave Continental Grain Co. v Islamic Republic of Iran [1983] 2 Lloyds Rep 620 as an example of facts where, despite the mandatory character of an injunction, the risk of injustice which would be caused by “wrongly” withholding it was far greater than the risk of injustice if it turned out to have been wrongly granted.

I have concluded that, in the light of the dealings between the parties from the time the claimant started to operate its aircraft from Blackpool airport, this is a case in which granting the relief sought would preserve a “dynamic status quo”. Mr Crane submitted that in this case there are problems caused by the need for constant supervision. He also submitted that the Order by Hamblen J failed to protect the defendant from a situation in which staff rostering arrangements mean that, if the airport is obliged by the Order to stay open to receive a Jet2.com flight outside operating hours, it will have to close during the promulgated hours on the next day. I will deal with these matters, which I consider can be dealt with in a similar way to the way the Order dealt with the issue of approach radar. But, putting them aside at present, I do not consider that if the Order is extended until trial but the claimant is then unsuccessful, the defendant will suffer irremediable prejudice. Mr Rankin’s evidence (paragraphs 52-53) is that logistical arrangements necessary to extend the airports opening hours from 2100 hours to midnight are likely to amount to some £900,000 per annum. He does not give the figure for keeping the airport open from midnight until 0700 hours, but equally he does not say that it is not possible to do so by making appropriate logistical arrangements.

The next question is whether there is a serious issue to be tried. It is clear from the terms of the Letter Agreement that it is concerned with the provision of airport services to a “low cost operator” which is seeking “a cost base that will facilitate…[its] low cost pricing”. The evidence is that this includes maximising the utilisation of each aircraft and thus maximising the number of flights it undertakes in any 24 hour period. That in turn involves schedules which permit sufficient early and late departures and arrivals to obtain the maximum utilisation of an aircraft: see Mr Meeson’s first statement, paragraph 32 and his second statement, paragraphs 14-18. In his first statement he states that a cost base that facilitates low cost pricing “is achieved not only by the charges set by the airport for the use of its facilities, but also by airline and airport co-operating to get maximum use from the aircraft”. He also states that the claimant’s aircraft typically fly two or three return flights (“rotations”) to high volume leisure sun destinations and that this is only possible with flight schedules which permit sufficiently early departures and sufficiently late arrivals. Since it started operating at Blackpool airport the claimant has scheduled flights outside the promulgated operational hours in all but two of its schedules and in the last twelve months 12.5% of its flights have been scheduled to do so: see [16]. There is no documentary support for the defendant’s submission that this was done as an indulgence or by way of special arrangement.

As to the pre-contractual statements, such statements are clearly inadmissible in order to assist with the construction of a written agreement. But in Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 at [33] and [42] Lord Hoffmann stated that evidence of what was said or done during the course of negotiating the agreement is not excluded if its use is to establish that a fact which may be relevant as background was known to the parties or to support a claim for estoppel. I have had regard to the evidence of Mr Meeson and Mr Whelan only in relation to the background to the Letter Agreement and in connection with the claim based on estoppel.

Against this background and the terms of the Letter Agreement, I have concluded that the claimant has a strong arguable case that the defendant’s change of position under which it now states that it is only prepared to provide services within the hours of 0700 – 2100 would involve a breach of the contract. Mr Rankin’s evidence (paragraph 9) is that movements outside the promulgated hours are a matter for the defendant’s discretion and not something to which the claimant is entitled. But there is no statement in the airport’s conditions of use or in the schedule containing the charges specified for other users that flights outside the promulgated operating hours are only possible by special additional agreement with the defendant. The language of the schedule of charges and the way the charges are set out in the document does not suggest that the airport will not be open outside the hours save by special agreement. It suggests that a surcharge will be levied for out of hours operations. There is nothing to the contrary in the defendant’s standard conditions of use. Nor is there in the Letter Agreement save that clause 5 indicates that the surcharge does not apply to such operations by the claimant. There is no evidence before me as to the terms of any communication by the defendant to the CAA pursuant to condition 7 of its licence.

It is therefore not necessary to decide whether the ground based on estoppel by convention gives rise to a serious issue to be tried. In the light of the evidence as to the mutual dealings I am not able to conclude that there is no serious issue to be tried on the matter of those dealings. But the variation part of the entire agreement provision in clause 4 of the Letter Agreement makes the prospect of a claim that the defendant is estopped fragile: see Sere Holdings Ltd v Volkswagon Group United Kingdom Ltd [2004] EWHC 1551 (Ch) and Lloyd v MGL (Rugby) Ltd [2007] EWCA Civ 153. In Lloyd’s case estoppel was held not to be inconsistent with the entire agreement clause because it only precluded reliance on pre-contractual representations and the representation relied on post-dated the contract. But the Court of Appeal recognised that a clause in suitable terms could preclude estoppel.

The next question is whether damages would be adequate. Mr Crane submitted that there are now no flights scheduled out of hours until the Christmas period, and only six departures and six arrivals during that period. He argued that these can be rescheduled as the airline has done in the past in the ordinary course of its business. For example on 8 October a schedule which did not include any out of hours flights was amended to include two such flights per week during the Christmas period. He also relied on the absence of evidence as to the numbers of tickets sold on flights scheduled to arrive or depart outside the promulgated hours. There is, however, evidence (Mr Meeson, first statement, paragraph 43) of the total number of tickets sold on 29, 30 and 31 October. This was respectively 476, 407 and 489. There is also evidence (Mr Meeson, first statement, paragraphs 45 and 47; second statement, paragraphs 68-69) that the cancellations of flights were followed by postings on the website of a local newspaper by people stating they no longer intend to travel with the claimant or intend to travel from Manchester as a result of the publicity about the dispute and the diversion of the flights on 30 and 31 October. The flights during the Christmas period and the twice weekly flights to Alicante and from Tenerife (see [16]) would have to be rescheduled. Rescheduling flights to fit new operating hours would involve acquiring different slots at other airports and making new arrangements with caterers, fuel suppliers, ground handling agents and others. Any rescheduling would be difficult during the busy Christmas period and, even if possible, particularly at that busy time, could have a further impact on the claimant’s reputation.

Hamblen J concluded (see [2010] EWHC 2904 (Comm) at [14] – [15]) that the reputational damage to the claimant flowing from the diversion of flights and the hardship to passengers “would be difficult to quantify and that the claimant’s interest would not be fully protected by a damages award”. I have concluded that, notwithstanding the evidence on behalf of the defendant and Mr Crane’s submissions, the position has not changed. I respectfully agree with Hamblen J.

I turn then to the balance of convenience. The claimant submits, as it did before Hamblen J, that if no order is made there is a clear risk of irremediable prejudice being caused to it. The claimant would need to reschedule flights to fit the proposed new operating hours. This would lead to flights being cancelled or diverted to other airports. Particularly in the busy Christmas and New Year season it may well be difficult to find suitable alternative timings at destination airports. There will have to be rearrangements with caterers, fuel suppliers, ground handling agents and other suppliers as well as changes to the bookings of passengers and crew rosters. As far as passengers are concerned, apart from any compensation payable either under the Package Travel Regulations 1992 and Regulation (EC) No 261/2004, there will be the reputational damage to which I have referred.

The prejudice to the defendant of a wrongly granted injunction in my judgment is largely the additional costs that are involved in providing services that the airport provided until October. Mr Crane’s submitted in the light of Mr Rankin’s evidence (paragraph 66) that, if the injunction is continued until trial, the defendant faces situations where it has a conflict between complying with the injunction and the requirements of its aerodrome licence. Mr Rankin’s evidence is that in the short term it would be “literally impossible” (paragraph 63) until the additional air traffic controllers that would be required are recruited and (paragraph 52) it would remove the flexibility which is necessary to run the airport in accordance with its licence. I have concluded that these submissions and this evidence do not justify refusing to continue the injunction. All that the defendant would be ordered to provide is the service that it has provided hitherto and thereby to maintain the status quo.

Mr Crane invited me to take into account the fact, notwithstanding paragraph 2(c) of Hamblen J’s order (see [4]), in what he described as flagrant conduct and contrary to an undertaking given to Hamblen J, the claimant posted a press release on its website referring to the dispute and the fact that an injunction had been granted. The press release on the website reported that an injunction was made “requiring Blackpool International Airport to maintain the provision of their services to Jet2.com”, a comment by Mr Meeson that “this is great news and underlines Jet2.com’s commitment to Blackpool International Airport” and “our flights are on sale for this winter and summer 2011…and we look forward to continuing to serve our customers from the north-west…for many years to come”. I accept Mr Shepherd’s submission that the posting did not breach the order because it did not disclose the terms of the Letter Agreement. In view of the articles in the regional and local media after the diversion of the flights on 30 and 31 October, which gave the impression that the claimant’s operations from and to Blackpool airport were subject to such disruption because of the dispute, it was necessary to say something. Mr Shepherd had said (transcript, 53 lines 14-17) that the claimant only responded to misleading accounts put into the media by the defendant. In fact, the passages quoted in paragraphs 99-100 of Mr Shepherd’s skeleton argument about which the claimant complains of, also do not disclose the terms of the Letter Agreement but they did put the defendant’s point of view into the public domain. This factor does not therefore provide me with much assistance. But it is important for both parties, pending trial, not to conduct themselves so that the temperature is raised beyond its present level.

I turn to the argument that an injunction would mean that the defendant will be faced with the impossible choice of breaching its statutory obligations or being in breach of the injunction (paragraph 54 of the defendant’s skeleton argument). The position in the past is that on the occasions I have set out and for the reasons given (see [27]) a number of flights have had to be diverted from Blackpool airport due to air traffic control issues, lack of fire cover or late arrivals. This issue is interlinked with the question whether an injunction should be refused because enforcement of the order would require continuous supervision by the court and therefore be precluded on well-known principle.

Mr Crane submitted that the terms of the Order are so vague that clarification from the court is likely to be needed on an ongoing basis. He gave as an example the provision of approach radar. This was the matter put before Hamblen J as a significant episode in the defendant’s attempt to make life impossible for the claimant at Blackpool. Mr Shepherd had submitted that the failure to provide radar outside hours was a breach of contract on the basis of Mr Meeson’s evidence. But Mr Meeson was wrong to say the 1 November NOTAM meant that there could be “no landings or take-offs…except in the 0900 – 1900 period”. In the case of approach radar, because the issue was identified, the Order was clarified by special provision: see paragraph 2(b). But Mr Crane submitted that this one example of the potential vagueness in the terms of the injunction was only addressed because it had been identified. There are, he argued, many other services and facilities which fall within the per capita passenger charges but without specification of a specific content and in respect of which specific potential issues have not yet been identified. He also pointed to changes made to the claimant’s schedules. Mr Crane submitted that the consequence is that the Order does not set out clearly what the defendant must not do and therefore leaves it either at peril of contempt or requires further clarification from and supervision by the court which, in Cooperative Insurance Society Ltd v Argyle Stores (Holding) Ltd [1998] AC 1 at [13], was identified as a reason for not granting specific relief, in that case specific performance.

As I indicated during the hearing, pending the trial the claimant should make no changes to the present schedules without the agreement of the defendant. There are other additional matters identified in the defendant’s evidence and by Mr Crane or which can be extrapolated from Mr Meeson’s evidence (see [27]) about the causes of diversions to other airports in the past. These concern the consequences of emergencies, adverse weather, delays in flights and problems with air traffic control due to rostering and maximum work hours regulations, and including similar issues concerning fire cover. I have concluded that these and the difference in the position of movements between 2100 and 2359 hours and those between 0000 and 0659 hours can be addressed in any order in a similar way to the way the position of approach radar was addressed in the Order made by Hamblen J. Accordingly, the “constant supervision” objection can be met by suitable wording in the Order.

For these reasons, I have concluded that the defendant should continue to be subjected to an injunction pending an expedited trial. The terms of the Order made by Hamblen J will, however, need to be varied in the light of this judgment. I will hear submissions by the parties as to the wording of the Order.