EMBARGOED UNTIL 00.01 ON SATURDAY 4 FEBRUARY 2006
COMMONS COMMITTEE WARNS GOVERNMENT IS ABANDONING FINANCIAL PROTECTION FOR MILLIONS OF AIR TRAVELLERS
Many travellers do not realise that 90 per cent of travel insurance policies fail to cover air carrier insolvency. The number of leisure flights protected under the ATOL is in free fall. In 1996, 96 per cent of UK international leisure passengers were protected by ATOL, by 2004 only 66 per cent were. By 2010 coverage could fall to around 20 per cent. In 2004 over 14 million UK international leisure travellers were without ATOL protection, up from 5.5 million in 2000.
EUjet's collapse in July 2005, which stranded thousands of passengers, exposed the current gap in protection. The CAA estimate that the total average cost for these passengers to return to England was £100 per person, with some having to pay as much as £200.
The £1 levy on flights abroad recommended by the Civil Aviation Authority is a means of ensuring that stranded passengers can be brought home when an airline collapses. The committee believes it is necessary because the existing protection scheme, ATOL (Air Travel Organisers Licensing), covers charter flights but does not cover the increasingly popular scheduled flights booked directly with airlines.
Transport Committee Chairman Gwyneth Dunwoody said:
"The Government's decision on this matter is wrong. To fail to implement the CAA's advice amounts to allowing the present policy of protection to whither on the vine. Plans for voluntary arrangements for repatriation are amateurish. Millions of air travellers continue to fly unprotected against the risk of an airline collapse.
"The advantage of this levy far outweighs the modest additional cost. No one relishes paying more to travel, but there is no practical cost-effective alternative if millions of UK travellers are to have peace of mind.
"In reaching its decision the Government has rejected sensible advice from the CAA and the views of large parts of the industry. It has also failed to provide a convincing explanation for its policy. An opportunity to improve consumer protection has been lost. The Government needs to think again."
Notes for editors:
1. Bids for interviews with the Chairman of the Committee, Mrs Gwyneth Dunwoody MP, should be submitted to 020 7219 3490.
The Second Report of Session 2005-06 (Financial Protection for Air Travellers: Second Report Abandoning Effective Protection, HC 636) can be accessed via the Committee homepage on the internet at 00.01am on Saturday 4 February 2006.
If you would like a copy of any House of Commons publication, and did not submit oral or written evidence to the relevant inquiry, then you may purchase it from the Parliamentary Hotline tel 08700 600 5522 fax 08700 600 5533, from the Parliamentary Bookshop or access it via the Committee homepage on the Internet.
Press Notice 25/2005-06 3 February 2006
Dr John Patterson, Clerk of the Committee