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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