Airline insolvency reforms 'could undermine Atol scheme'

Following the collapse of Monarch in October 2017 and Thomas Cook in September, the government finally set out its proposals for airline insolvency legislation on Thursday (19 December).

It follows publication in May of a report by the Airline Insolvency Review, which called for a small levy on all flight tickets to fund a complete repatriation scheme, underwritten by insurance sourced by the airline sector.

Key reforms proposed by the government in Thursday’s Queen’s Speech include introducing a special administration regime allowing airlines to repatriate their own passengers; extending the CAA’s remit to include repatriation of Atol and non-Atol protected passengers; and giving the CAA greater regulatory powers to oversee airlines’ financial health and mitigate the impact of future insolvencies.

Aito chairman Derek Moore said the proposals, while attempting to address industry grievances on aviation issues, were muddled.

“Allowing carriers to keep flying while they repatriate passengers sounds like progress of a sort, but they still have not accepted the idea of charging a levy on all flight tickets – as suggested by Aito for many years,” Moore told TTG.

“Making the CAA responsible for flying all passengers home, whether Atol protected or not, begs the question: where does the CAA get the funds to fly all customers home?” said Moore, who added it was at least “heartening” the government was addressing the issue of repatriation.