Select Committee on Transport Written Evidence


APPENDIX 5

Memorandum submitted by BMI

  bmi weLcomes the opportunity to comment on the ongoing debate about consumer protection for scheduled air travellers.

  We have made our views known in two rounds of consultation run by the Civil Aviation Authority.

  We have also contributed to the Department of Transport's working group on consumer issues.

  The failure of EUjet was regrettable. There can be little compensation for those passengers who have had their travel plans disrupted, especially those at short notice or for those who were abroad when the airline failed.

  Nevertheless, we believe that before the Government makes up its mind it is worth considering a number of important points:

    —  Consumers buying air tickets on credit cards spending over £100 will generally be entitled to a refund from the card company.

    —  Travel insurance is available against various eventualities including airline failure. Consumers make their own choice about insurance when buying other goods or services—why should travel be any different?

    —  It is nonsensical to require passengers of long established stable airlines like bmi to subsidise the potential failure of others who may be less secure.

    —  The relevant airline licensing body (in EUjet's case the Irish CAA) has a duty to review and monitor the financial fitness of its airlines. bmi, like other UK airlines has to satisfy the UK CAA on a regular basis.

  In the EUjet case, we understand that other airlines were able to offer seats at minimal cost to those uninsured passengers. In other recent examples—such as Swissair and Sabena—other carriers have stepped in to help repatriate passengers or offer alternative routings at reduced costs. In addition, the IATA system has, previously, provided for member airlines to honour coupons from other carriers.

  As mentioned above, bmi has participated in discussions with DfT about providing advice to customers through our web sites and other means pointing out the necessity to take out travel insurance covering all eventualities. We will continue to work with the Department and other parties on best practices.

  The ATOL scheme was developed for a very different economic and social market when repatriation from overseas was more problematic than it is now. Extending ATOL to scheduled air travel (including domestic services and business purpose air travel but not rail or ferries?) makes little economic or policy sense.

  ATOL's usefulness has expired. The CAA and DfT should be urging the European Commission and other EU states to scrap the Package Travel Directive and look at market based solutions to consumer protection.

  We are willing to work with the Committee, Government and other parties to produce the best practice.

19 September 2005





 
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