A government re-think of abandoned plans for a £1 levy on scheduled airline seat sales is being demanded as the bill for repatriating 110,000 passengers caught up in the Monarch failure was estimated at £65 million.
The call came from the Association of Independent Tour Operators which calculated that just 20% of Monarch holidaymakers being flown home on a fleet of specially-organised rescue flights are covered by the Atol travel protection scheme.
This was because Monarch’s Atol only covered the package holidays it sold, not the huge number of scheduled airline seats it handled – leaving 90,000 people who had booked their flights outside any protection scheme.
The Civil Aviation Authority, which is managing the effort to fly holidaymakers home with a fleet of more than 30 chartered aircraft, presented a plan to government that Aito claimed would have solved the “inherent and serious problem” with airline collapses back in September 2005.
Aito chairman Derek Moore said: “The CAA proposed a £1 levy – the price of a bag of crisps – on all passengers flying out of the UK.
“It was turned down – lost by just a couple of votes in the House of Lords. Had it been implemented, the £65 million cost of repatriating Monarch passengers would have been covered easily, without any impact on the taxpayer, travel industry or credit card companies.
“We urge the government to act now to implement the simple £1 levy solution on all outbound flights.
“This situation should have been foreseen, and will happen again. The government must think hard and long about its current stance of ignoring financial security requirements for airlines.
“It should immediately extend Atol to cover scheduled seats following this debacle, because the Atol system simply doesn’t now cover enough of the travelling public; speed is of the essence to redress the years that it has wasted since 2005, falsely believing that airlines aren’t going to go out of business.
“All outbound flight sales should immediately include £1 per seat, whether scheduled or chartered, to deliver full financial protection and repatriation for all. It’s a common sense measure; let’s hope common sense prevails.”
Moore added: “What is required is significantly better planning – and a better understanding of the travel industry, too.
“Did the government liaise with any of the trade bodies which could have advised it on this matter? Or did it simply dive in and sign a cheque for £65 miilion, which the taxpayer, the travel industry and the credit card suppliers will be expected to foot?
“The travel industry faces challenges day in, day out – from air traffic control strikes to ferry strikes, from hurricanes to situations such as the ash cloud, plus geopolitical challenges and terrorism; it is well versed in coping with adversity, and often its clients are unaware that there was ever a problem.
“Our advice is practical and pragmatic, and we are disappointed that government seemingly chose not to involve us in finding a better solution to the Monarch problem.
“Government harbours the false belief, supported by strong airline lobbying, that airlines won’t go bust – despite the evidence in plain view. Just think about XL, Swissair, Air Berlin, Alitalia… there is a long history of failed airlines, in Europe and the wider world, and airlines are much more likely to fail than tour operators.
“Yet government has done nothing to protect passengers booking scheduled airline seats, as with Monarch, while tying tour operators up in unnecessary red tape – the Atol system – that they have now apparently chosen to override and ignore.
“It’s a very uneven playing field – airlines and tour operators are treated in a totally different manner – and we in the industry are rightly annoyed that the government has ridden roughshod over us to repatriate people whom it failed to protect via scheduled airline legislation, as was suggested 12 years ago.”
All travel companies with a European programme – not only Aito members, but also Abta members and many other companies which operate outside the trade associations – will have been hit in some way by the collapse of Monarch, whether they bought a few ad hoc seats from the airline or relied on it for regular flights to European destinations, according to Moore.
The chairman of the 120-member association said: “What brought Monarch down was a combination of two things. Firstly, selling its airline seats far too cheaply, due to excess capacity in the market. There are simply too many planes flying, due to the proliferation of the so-called ‘no-frills’ carriers.
“And, secondly, the fact that destinations such as Egypt, Turkey and Tunisia, until recently visited by millions of holidaymakers annually, have become out of bounds due to security concerns, forcing airlines to move their planes on to European routes. Both contributed significantly to the collapse of this 50-year-old airline.
“The same pressures are weighing on other airlines too,” Moore warned.
“While the government dithers, 12 years later, about a simple and robust plan of action, we urge holidaymakers to book trips that offer them not only full financial protection but also all the bells and whistles, such as acceptance of full responsibility for the actions of their suppliers.
“All Aito’s specialist holiday companies currently offer these important extras, included in the price.”
Meanwhile, Tracy Cray, director of card scheme compliance at The Chargeback Company, predicted that the wider travel industry is about to face a huge backlash from cancelled Monarch flights.
“Repercussions from the biggest UK airline ever to cease trading will be seen throughout the travel and aviation sector, as desperate customers begin making fraudulent claims in attempt to claw back their losses,” she warned
Monica Eaton-Cardone, co-founder of the company, added: “The huge side-effect of the administration of Monarch Airlines will reach travel operators worldwide, but problems are not just limited to this one case.
“With over 3.8 billion air travellers taking to the skies each year, the potential threat to customer’s travelling without Atol protection is detrimental.
“Customers need to equip themselves with top insurance before making large-figure holiday bookings.
“Likewise, travel operators and payment providers need to be on the lookout for the number of fraudulent claims that inevitably follow breakdowns in the system as we have seen.”
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