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Airlines welcome bankruptcy rules review after Monarch collapse

The UK government is expected to announce today a review into airline bankruptcy following the collapse of Monarch Airlines in October.

The UK’s fifth largest carrier collapsed leaving the government with having to operate a flying programme to repatriate over 100,000 customers at an estimated cost of £60 million.

The government hopes to recoup some of this money though credit card issuers and tour operators who were legally obliged to pay for replacement flight under Atol rules.

However, the taxpayer is likely to face a significant bill for the failure which led to calls for a bankruptcy protection-type arrangement as is in place in Europe and the US.

This would have allowed Monarch to continue flying while either a buyer was found or deal done to save all of part of the airlines, or it was wound down.

Such an arrangement was in place for Air Berlin and Alitalia preventing a chaotic sudden collapse of the German and Italian airlines this year.

UK chancellor Philip Hammond is due to make an announcement during this morning’s autumn Budget about an independent review of airline bankruptcy.

Airlines’ association Airlines UK said in a statement: “Airlines welcome the review announced today.

“This is an incredibly complex area and it’s important ministers get it right, having considered all of the many policy options carefully and following a thorough consultation with industry.

“We look forward to receiving the terms of reference and engaging accordingly in the months ahead.”

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