Organisations led by the umbrella group European Travel Agents’ and Tour Operators’ Associations has called for rules covering airlines to be introduced similar to the EU Package Travel Directive which protects consumers.
A letter to officials in Brussels warned: “On average it is estimated that passengers lose €431 when an airline goes bankrupt…87% of this is not recoverable at all because there are no mandatory insolvency protection schemes in the airline sector, contrary to the package travel sector.
“In addition, when an airline goes bust, passengers can be left stranded abroad without any solution to be repatriated.
"Passengers are not only left with worthless tickets of a bankrupt airline; they also have to purchase new tickets often at short notice at very high prices. Even the so-called “rescue fares” on other airlines are often expensive and only offered when there are empty seats available on flights.”
The UK government was considering a similar proposal, but this has now gone quiet.
The letter said there were 87 airline insolvencies in 2011-2019, affecting 5.6 million consumers.
The European Commission has said the EU “must help passengers” in the event of an airline’s collapse or major financial difficulties, recognising flight-only sales are not covered by the EU directive.
However, the lobby group said: “The policy options proposed – such as better informing passengers about optional insolvency insurance policies available on the market or offered by airlines or protection granted via certain payment methods - have already been identified… as partial and insufficient to protect all consumers in the same way.
“If these policy options are selected, most consumers would still be exposed to significant losses.”
The signatories argue effective protection can only be achieved by a mandatory insolvency protection mechanism mirroring the Package Travel Directive.
They warned: “Stronger monitoring can under no circumstances replace the need for mandatory airline insolvency protection.”
The letter has nine backers, including the European Tourism Association and European Disability Forum.
