Abta has welcomed a commitment in the Queen’s speech today about legislation to reform the airline insolvency process.
A statement from the new Conservative government said the airline insolvency legislation aims to “protect passengers in the event of an airline going bust by reforming the airline insolvency process”.
The planned law would introduce a repatriation ‘toolkit’ of mechanisms for companies and passengers, including making it easier for the Civil Aviation Authority to grant a Temporary Airline Operating Licence so that an airline can continue repatriating passengers following insolvency.
The new law would also enhance the Civil Aviation Authority’s powers to improve its “oversight of airlines in distress and mitigate the impacts of a future airline failure”.
It would extend the CAA’s remit to apply to the repatriation of both Atol and non-Atol protected passengers.
The government said the legislation would make sure the industry can “get passengers home quickly and effectively if and when an airline collapses”, adding that this will “balance strong consumer protection with the interests of the taxpayer”.
The travel association said: “In the wake of the failure of Thomas Cook, Abta has urged the government to bring forward, without delay, a consultation to consider the recommendations of the Airline Insolvency Review.
“Abta also requested that airline insolvency is separated from the wider Aviation Strategy consultation process, which is delayed until next year.
“Following closely on the heels of the failure of Monarch, in October 2017, the demise of Thomas Cook has once again shone a spotlight on the disparities in consumer protection between holidaymakers on package holidays and those who book their own arrangements directly with airlines and other suppliers.”
Mark Tanzer (pictured), Abta chief executive, said: “While operationally well-managed by the CAA, the decision to once again repatriate holidaymakers, regardless of whether or not they were legally entitled to that protection, undermines the package holiday sector by incentivising consumers towards unprotected arrangements.
“Abta has long argued for clarity regarding airline insolvency arrangements and welcomes the commitment in the Queen’s speech to bring forward legislation.
“This is a complex issue, as was recognised by Peter Bucks in the Airline Insolvency Review recommendations, and should include a full consultation to provide a solution as confusion regarding the protection provisions is damaging to customers and businesses alike.”
The Queen’s Speech today set out the Conservative government’s agenda for the 2020, following last week’s election win.
Legislation to take the UK out of the European Union on January 31 was among more than 30 bills being announced during the state opening of Parliament.
The government also plans to compensate Thomas Cook customers who have personal injury claims for which the company would have been liable.
The government also said it will announce more details about cuts and a “fundamental review of business rates”, which would be of interest to high street travel agents.
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