Queen’s Speech to feature airline insolvency reforms

Following the collapse of Thomas Cook last month, and that of Monarch two years earlier, the government will seek to ensure in future airlines can use their own aircraft to repatriate their own stranded passengers in the event of an insolvency episode.

Ministers have come in for criticism in the wake of the Cook collapse for failing to act on the review’s recommendations in May, even if any subsequent reforms would have come too late to have made a difference to the Cook situation.

The CAA was once again required to embark on a massive repatriation exercise – Operation Matterhorn – when Cook failed to bring home around 150,000 passengers stranded overseas. The operation was around twice the size of the Monarch repatriation, and is expected to come at an eventual cost to the taxpayer of around £100 million.

Transport secretary Grant Shapps has said he has spoken to the review’s chairman, Peter Bucks, to “draw on his expertise” with a view to bringing forward airline insolvency reforms “as quickly as possible”.

It is understood proposals could be tabled in Monday’s Queen’s Speech (14 October).

Bucks, speaking exclusively to TTG following the collapse of Cook, said a failure by ministers to act on the Airline Insolvency Review would become progressively less defensible, particularly if there were to be further airline insolvencies.

Bucks’ recommendations included developing an insolvency regime similar to that of Germany where failed airlines are allowed to use their own aircraft to repatriate their passengers, rather than respective Civil Aviation Authority of the country in which the airline is registered setting up, as it was described during the Cook repatriation, a “shadow airline” to bring passengers home.

The effect of the changes would, in essence, allow collapsed carriers to be placed in special administration allowing them to continue flying.