Airlines hit out at insolvency levy

Europe’s leading airlines oppose a levy on fares to fund repatriation of passengers when a carrier fails and instead want regulators to consider the finances of airlines when extending licences to operate.

Airlines for Europe (A4E) chief executive Thomas Reynaert spelled out the carriers’ opposition to a repatriation levy at an Airlines UK consumer seminar in London on Thursday.

A levy was proposed last week by the UK government-appointed Airline Insolvency Review.

Reynaert said: “Consumer protection in case of an airline’s insolvency has unfortunately made its way on to the agenda in the UK.”

He insisted: “Regulatory action would simply not be appropriate, considering the percentage of passengers confronted with airline insolvency is extremely low.”

Instead, he argued: “The risk of carriers becoming insolvent would be minimised by a proper assessment of the prolongation of AOCs [air operating certificates], taking into account their financial position.”

Reynaert said: “We are open to explore non-regulatory solutions, not imposing additional unfair cost burdens on the vast majority of passengers using financially strong airlines.”

A4E represents airlines including British Airways and Iberia owner IAG, the Lufthansa Group, Air France-KLM, easyJet, Ryanair and Norwegian.

Reynaert also hit out at EU rules on air passenger rights and “the abusive practices of claims agencies” over delayed and cancelled flights

He argued “large areas” of EU Regulation 261 on air passenger rights “need clarification”, saying: “Airlines receive many claims, even if only a fraction turn out to be justified.

“The existing rules are to a wide extent contained in court decisions and in some cases counterproductive – for example, incentivising airlines to cancel flights in the event of longer delays outside their control.

“The lack of clarity [is] coupled with often misleading external information which consumers rely on. Greater legal certainty is needed to limit the recourse to national and EU courts.”

He called on the European Commission and European Parliament “to proceed swiftly” in updating the regulation.

At the same time, Reynaert warned of increasing air traffic delays in Europe this summer, saying: “En-route delays last month increased by almost 40% compared with March.

“Over 750 flights per day had an en-route delay of at least 15 minutes, 7% more than in April last year.

“This is deeply concerning heading into the peak summer months.”

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