Jet2.Com Ltd v Blackpool Airport Ltd

Contractual obligations to use best endeavours or all reasonable endeavours are construed in context. Their content depends on the contractual objective, the parties’ allocation of commercial risk and the surrounding circumstances known when the contract was made. They do not ordinarily permit a party simply to abandon performance because performance has become unprofitable. A distinction remains between an obligation to provide a particular result throughout a contract and an endeavours obligation, whose application may be highly fact sensitive. Where a contract for airport services contemplates low-cost operations, an obligation to promote those services and provide a cost base facilitating low-cost pricing may include securing flexible operating hours beyond published hours. A unilateral refusal to provide such services may therefore constitute a serious breach, although the court may decline to declare fixed operating hours for the whole contractual term.

Jet2.Com Ltd operated scheduled low-cost services from Blackpool Airport under a 15-year letter agreement with Blackpool Airport Ltd. The agreement required the parties to co-operate and use their best endeavours to promote Jet2’s low-cost services. It also required the airport to use all reasonable endeavours to provide a cost base facilitating Jet2’s low-cost pricing, and provided for charges for airport services.

After several years of accommodating flights outside the airport’s published operating hours, BAL announced that it would accept only movements scheduled between 0700 and 2100. Jet2 sought declarations that the agreement required continued accommodation of flexible operating hours and relied alternatively on estoppel by convention. The central issues were the proper construction of the agreement, the effect of the endeavours obligations, whether BAL’s conduct was a breach, and the scope of any estoppel.

1. Construction. The agreement concerned low-cost services from and to Blackpool Airport. In that context, “promote” meant furthering or advancing the services, rather than merely advertising them. The obligation to provide a cost base included, in a broad sense, providing facilities and services that facilitated low-cost pricing. Flexible operating hours were within the object of the parties’ best endeavours obligations.
2. The factual matrix supported that construction. The parties would have contemplated early departures and late arrivals, particularly for summer leisure services, aircraft utilisation and the operation of based aircraft. The court interpreted the agreement from the circumstances known at the date of contracting, not from subsequent conduct or later changes in the parties’ commercial interests.
3. Best and all reasonable endeavours. The expressions had the same meaning in this agreement. Their content remained a question of construction and fact, shaped by context. The objective standard did not mean that BAL could reduce or abandon performance whenever operating the airport became commercially undesirable or unprofitable. The parties had assumed commercial and risk-bearing obligations in a co-operative venture.
4. The endeavours obligation did not amount to an absolute commitment to provide specified hours throughout the 15-year term. Whether the obligation had been performed would depend on the circumstances at the relevant time. The court therefore declined to give a declaration prescribing immutable operating hours for the remainder of the agreement.
5. BAL’s sudden and unilateral refusal to honour Jet2’s scheduled flights except on conditions was a serious breach. Opening outside the published hours had, at least in principle, formed part of the service provided under the agreement and was not merely an indulgence or goodwill concession.
6. The alternative estoppel claim could not give Jet2 more than the proper construction of the agreement allowed. The court left the precise scope of the order for further argument. Jet2 succeeded to the extent indicated.