Abta has demanded changes to the Atol scheme to ensure all airline passengers are protected following the collapse of Monarch.
The UK’s fifth biggest airline collapsed at the beginning of this month leaving almost 90,000 people stranded abroad but all were repatriated at no cost whether or not they had bought Atol protected seats.
A bill on the new Atol scheme that will be brought in next year to reflect a revised EU Package Travel Directive is making its way through Parliament and will be debated in the House of Lords today.
Labour peer Lord Rosser has proposed an amendment to ensure that all airlines passengers are protected in the future should a carrier fail.
Transport secretary Chris Grayling has previously suggested there might be a review of Atol and UK insolvency laws that would allow airlines to enter administration in an orderly manner so they can keep flying while winding down meaning the government does not have to intervene.
The CAA repatriation flying programme which brought home Monarch customers over two weeks cost a reported £60 million.
In a statement ahead of the debate Abta said: “The government’s recent decision to repatriate Monarch airline passengers, regardless of whether or not they were protected by the Atol scheme, highlights severe flaws in the current regime.
“The Atol scheme is designed to ensure that customers who buy package holidays will be repatriated or refunded at no extra cost if the organiser of their holiday fails.
“However, Atol does not offer protection to customers who buy airline seats directly from airlines or through aggregator sites.
“In the case of Monarch, this was the vast majority of the passengers who were stuck overseas and had to be brought home by the government.
“Abta welcomes the transport secretary Chris Grayling’s commitment to consider potential reforms in light of the Monarch failure, and believes the Atol Bill, currently in the House of Lords, provides an early opportunity to put in place legislation to protect consumers if another airline collapses.
“Abta supports a proposed amendment to the Bill by Lord Rosser, to make regulations so that all passengers can be protected in the event of a future airline failure.
“Abta believes the government should consult with the industry and consumers to determine the precise model for delivering any new consumer protection scheme, for example through insurance or a parallel Atol scheme for airlines.
“Any new scheme should ensure that all passengers are protected regardless of how they booked their flights, and that subsequent costs to the taxpayer are reduced or removed entirely.”
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