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Airline failure protection open to passengers

Single airline failure could cost hundreds of millions

[August 11th 2008]

Airline passengers

Asking the Civil Aviation Authority to impose a levy for airlines similar to the ATOL Protection Contribution for tour operators is ludicrous says specialist insurance provider International Passenger Protection.

Last week the Air Travel Insolvency Protection Advisory Committee (ATIPAC), a government advisory committee, added to the debate about protection for passengers of airlines that go bust by calling for airlines to pay the £1 per passenger ATOL Protection Contribution (APC).

But IPP director of international risks, Paul Mclean, says that the CAA already has “great difficulty” implementing the existing levy.

“Having evaluated the airlines and likely failures, single airlines could cost between £60 million and £500 million when repatriation costs are taken into consideration. What sort of levy therefore would be needed to cover these potential losses and at what cost to the consumers with already increased prices due to fuel increases and numerous existing taxes?,” questions Mclean.

“If ATOL were interested in protecting airlines they had this opportunity when the ATOL licence was granted to the Silverjet Group yet due to the restrictions placed upon the ATOL Licences sales flight bookings not made through a travel agent or forming part of a package holiday were not protected and thus thousands of people were stranded or lost their money,” Mclean continues.

He points out that consumers already have a choice when it comes to protecting themselves against airline failures: “There is plenty of availability for consumer protection in the market today and this includes the “ABTA Protection Plan” that is available in every ABTA office throughout the country and on travel policies including ABTA GUARD and the Post Office, once again available in every town in the United Kingdom. Some airlines already provide an offer of protection and these include British Airways, Ryanair, easyJet, and Flybe, and many others are in negotiations to do likewise”.

A new website, www.protectyourholiday.com, is about to be launched that will enable consumers to protect themselves at a nominal cost. “This site can be linked to any airline site and to all operators who are not already offering consumer protection and are approved by IPP,” Mclean explains.

Written by: Nick Purdom


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