CAA ‘to back £1 passenger protection levy’
The Civil Aviation Authority is to call for a £1 levy on air passengers to build up a £250 million protection fund against failed airlines.
According to The Independent, the CAA will call for the fund to be built up over three to five years to insure passengers against the consequences of an airline becoming insolvent.
The newspaper says it is understood that the Department for Transport has given approval to the proposal despite opposition from the Treasury. The levy could now be included in the Aviation Bill going through Parliament.
According to reports, the CAA believes the ATOL scheme is now inadequate because it only covers customers booking air-based holidays with tour operators but those who book direct with an airline or organise DIY breaks via the internet can find themselves without cover.
A document from the authority reportedly described the present system as inefficient and one which imposes a substantial burden on tour operators through bonding requirements, so much so that some are reorganising their businesses so that they are not covered by the ATOL regime.
But the idea of a levy will provoke strong opposition from major airlines such as British Airways and Monarch who argue that thier passengers should not have to pay to bail out weaker carriers.
Report by Phil Davies
Phil Davies
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