Demand for EU-wide airline insolvency consumer protection

Demand for EU-wide airline insolvency consumer protection

A mandatory mechanism to protect passengers against airline failure should be costed into ticket prices.

The European Travel Agent’s and Tour Operators’ Association (Ectaa) is calling on the European Commission to introduce rules to protect EU passengers against airline insolvencies.

The demand follows the collapse of Monarch, Air Berlin and Austrian subsidiary Niki in the last quarter of 2017.

The Irish Travel Agents Association, which is a member of Ectaa, is also campaigning for all Irish travel providers to be bonded by the country’s Commission for Aviation Regulation to ensure that passengers are protected from future travel provider collapses.

More than a million bookings were affected by the bankruptcy of Air Berlin, Monarch Airlines and Niki, Ectaa reported today.

Over 110,000 Monarch passengers were abroad following the sudden bankruptcy, while a further 750,000 people had paid for flights which they were not able to take.

At least 180,000 Air Berlin customers who booked flights that were been cancelled will not get reimbursed and 410,000 bookings with Niki, including 210,000 bookings from travel agents, were cancelled.

ITAA chief executive Pat Dawson said: “As airlines are among the largest travel providers in the EU, we believe it is necessary that they, along will all other travel providers, be bonded in order to protect consumers.

“With so many changes in the European aviation market, airlines need to offer guarantees against their own financial failure, as is the case for travel agents and tour operators.”

The ITAA has repeatedly called on the Dublin government to review the legislation around bonding among travel providers in Ireland.

Almost 4,200 Irish customers made claims to the Commission for Aviation Regulation amounting to €3.8 million following the collapse of Lowcostholidays in 2016.

These claims depleted the Travellers’ Protection Fund, which is made up of contributions from tour operators and administered by the Commission, by 75% as Lowcostholidays’ bonding level was underprovided.

Association president Cormac Meehan added “The ITAA have been pushing for a collective bond among all travel agents, tour operators and airlines.

“We are suggesting that a small levy be included in every ticket price to bond airlines and protect consumers.

“As it stands, 85% of the travelling public remain unprotected by outdated bonding legislation.

“We have contacted the minister for transport, tourism and sport many times about this issue as it will be the Irish taxpayer who will have to pay if there was to be another travel provider collapse in Ireland.

“We are now working closely with the ECTAA to try and reform the legislation at EU level.”

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