07 October 2008

Passenger protection "mess" needs cleaning up

ABTA president Justin Fleming opened the Travel Convention with a call for government to clear up the passenger protection Ã~´messÃ~´.

He repeated industry calls for a universal form of protection for travellers in when airlines go bust.

Ã¢â¬ÅâœFor the sake of 10 to 20p we could have failsafe protection for all of our customers,Ã¢â¬~ Fleming told delegates.

Describing the existing arrangement whereby tour operators provide failure protection through the ATOL scheme but airlines do not as Ã¢â¬Åâœa bit of a messÃ¢â¬~ and urged the government to create a level playing field.

by Phil Davies

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It will cost a lot more than 20p!

I agree that the Government should create a level playing field - many still believe that an ATOL protects the consumer if the airline goes bust, but of course it doesn't unless they are a bonded tour operator, or if their failure brings down the tour operator. However, since I don't think &#pound;1 per head for the ATOL levy is going to be enough, adding airline failure could double the cost - witness recent failures. As XL was still bonded, their failure is reported to have cost the insurers over &#pound;20m. Without the backing of the insurance market this would have been a charge on the levy/Air Travel Trust, wiping it out. Bearing in mind we are in a recession, if you want to calculate the real cost of passenger protection. Levies are dreadful devices by the way - everyone pays the same reagardless of their level of risk. It will all end in tears.

By Brian Kirsch, Tuesday, October 7, 2008