EU - Transport Policy

Written evidence from ABTA (EU 19)

ABTA represents over 1,400 UK travel agents and tour operators. In the interests of brevity, we are limiting our submission to the most pressing concern for many of our members, namely the lack of financial protection for consumers in relation to scheduled airline failure. The opportunity to contribute to the Committee’s work is timely in view of the Department for Transport’s revision of the ATOL regulations and the current work of the European Commission on passenger rights, airline insolvency and the Package Travel Directive, which are expected together to create a clearer and more comprehensive system of financial protection for travel.

ABTA is committed to securing comprehensive consumer protection for travellers in the event of insolvency or company collapse. Ensuring that there is a high level of consumer confidence in travel is essential for the continued success of our industry. The spate of recent airline failures has shaken this confidence These include Zoom Airlines, XL Airlines, flyGlobespan, Highland Airways and Kiss Flights that, between them, left some 100,000 UK passengers stranded overseas and a further 380,000 passengers with lost forward bookings. There have been similar high value failures across Europe.

When passengers book their holiday components separately, rather than buying a package holiday, if they haven’t travelled, not only may they have they lost their flight but also monies paid for advance bookings for accommodation and car hire which might not be refunded.

This lack of protection is at odds with the protection offered to consumers in the package holiday industry which is regulated under the Package Travel Directive 314/90/EEC. Package organisers have to assume liability for passengers and provide financial guarantees for eventual passenger refunds and repatriation, whereas scheduled airlines do not. This creates an uneven level of protection across the industry, an illogical discrepancy between the rights of airline passengers (even those on the same aircraft) depending on how they purchased their ticket. This adds to the confusion experienced by travellers in understanding whether they are protected or not.

The arguments in favour of adopting a comprehensive system of passenger protection for all flights that originate in the UK (or indeed in Europe) have been articulately expressed not least by the Committee in its report of July 2004 which had the effect of concentrating minds on the very significant deficiencies of the existing passenger protection system. This is fragmented, confused, insufficient and leaves passengers exposed in a way of which many are unaware and comes as an unpleasant and unwelcome surprise.

ABTA would appreciate the Committee’s support, via UK and EU regulation, for a comprehensive system of passenger protection. We would welcome the opportunity to contribute further to the Committee’s work on this matter.

January 2011