The Treasury has confirmed that better consumer protection for flyers would be on the agenda during the Autumn Budget, with Philip Hammond expected to announce the review, which will be led by an independent chair.
It follows the collapse of Monarch Airlines on October 2, which left 110,000 passengers without a return flight home, and threw the holiday plans of 750,000 into disarray.
All 110,000 customers were repatriated by the CAA on government orders, regardless of whether they were protected by Atol (on package holidays) or were travelling on seat-only bookings (which are not protected under the scheme), at an estimated cost of £60 million.
The situation highlighted the uneven nature of consumer protection when an airline fails. “The review will consider how insolvency arrangements can be reformed… protecting passengers and ensuring value for the taxpayer,” said the Treasury in a statement.
“It will look at what options there are to ensure passengers of a failed airline are protected, and that holidaymakers feel safe that no matter what happens to their airline, they will always get a flight home.”
The Treasury added that the chair for the review would be appointed “shortly”, and that the review would result in an interim report by summer 2018.
The initial findings will be reflected in the consultation on consumer issues for the Department for Transport’s Aviation Strategy, and a final report produced by the end of 2018.
Mark Tanzer, Abta chief executive, said: “It is also important the review considers its activities in the context of the Package Travel Directive, which is due to come into force in July next year... I look forward to working closely with the review body.”
A spokesperson for Airlines UK added: “This is an incredibly complex area and it’s important ministers get it right... following a thorough consultation with industry.”
