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.