05 Apr

Government review into airline insolvency

ABTA has long-argued that consumer protection hasn’t kept pace with the changing ways in which people can book travel. On Friday the Government outlined the independent review into airline insolvency – which was announced in the wake of the Monarch collapse.

As we all know, when Monarch went out of business the Government took the controversial decision to repatriate 110,000 customers – the vast majority of whom were not covered by the company’s ATOL licence. As I said at the time, this undermined the existing protection regime and set an expectation that the same will happen again if an airline fails. It also highlighted the urgent need to revisit the issue of consumer protection, so this review is a welcome and necessary step.

We understand the review will look at consumer protection for both repatriating and refunding customers. We expect it to consider a wide range of options - including allowing airlines to wind down in an orderly fashion, so that they are able to conduct and finance repatriation operations with minimal or no Government intervention – and how the travel insurance market could make provisions for refund protection. The review will provide an initial report to Government by summer 2018, and the final report by the end of this year.

We will input into the review and will consult with ABTA Members in due course to gather your insight and views.

The current system is not clear for passengers or the industry, and is inconsistent in its application, so the Government will need to make sure the outcome delivers the right protection and clarity for passengers and industry.

Mark Tanzer, Chief Executive