Britain's House of Commons Transport Committee calls for levy to cover airline insolvency

Airline Industry Information, Feb 6, 2006

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A British parliamentary committee has called for the government to impose a levy on air travellers to cover them against airline collapses.

The House of Commons Transport Committee wants to impose a levy on all passengers travelling from Britain and in a report it calls for the aviation minister Karen Buck to reverse a decision against a recommendation by the Civil Aviation Authority (CAA) for adding GBP1 to the cost of all outbound flights. The minister rejected the recommendation last year. The charge would reportedly replace the existing ATOL bonds used by tour companies to cover insolvency.

The Transport Committee said that the decision should be reversed because less than 50% of travellers would be covered by ATOL by 2010, with only one in ten travel insurance policies including air carrier insolvency. The ATOL scheme requires tour operators that sell flights and holiday packages to lodge a financial bond that can be used by the CAA to recompense passengers in case of operator insolvency. Independent travellers purchasing tickets directly from an airline are however not covered by ATOL.

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