“Now is an opportune moment to review how best to ensure the consumer is protected against the consequences of airline insolvency,” said chair Peter Bucks.
The review is timely, he insisted, because the rise in demand for air travel, alongside anticipated consolidation in the aviation sector, means future failures could have “major adverse implications for the government and the taxpayer”.
The real reason for the review though is, of course, the demise of Monarch Airlines. Occurring in the middle of the Tory party conference in October, the government opted to rescue all 110,000 passengers, regardless of whether they were covered by Atol. Had the government not done so, the PR cost might have been greater than its £60 million financial bill. Regardless, it’s a situation – and cost – the government is anxious to avoid repeating.
The review is music to the ears of many in travel who have been pushing for fairer protection for holidaymakers since Atol’s inception in the 1970s. The challenge remains in how to achieve it.
Many insist a universal levy is the best answer – imposed on all holidaymakers flying out of the UK, ensuring everyone is covered in the event of a company failure. Yet it’s a move likely to anger those in the airline sector. British Airways has lobbied hard against such proposals, claiming it destroys its competitive advantage and that BA passengers would end up funding the repatriation of passengers hit by the collapse of rival airlines.
Nonetheless, the failure of Monarch has finally got the government’s attention. The hefty bill it was forced to pay highlighted why consumer protection must be improved and it demonstrated the unevenness of the playing field. Now MPs are listening, perhaps change is finally on the way – make sure you have your say in helping to level it.
