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European Parliament; a resolution for passenger protection against airline failure

The European Parliament has adopted a resolution which recognises the importance of the issue of airline bankruptcy for passengers. It considers a number of options to strengthen the position of passengers and calls on the European Commission to examine a legislative proposal and submit it if appropriate by 1 July 2010…

The European Parliament has adopted a resolution which recognises the importance of the issue of airline bankruptcy for passengers. It considers a number of options to strengthen the position of passengers and calls on the European Commission to examine a legislative proposal and submit it if appropriate by 1 July 2010. 

When an airline goes bankrupt, many passengers have no recourse against the airline to recover the money of their unused ticket or to obtain repatriation if they are stranded abroad. In the last decade, almost 100 European airlines have gone bankrupt, leaving hundred thousands of passengers stranded abroad or without reimbursement.

There is a big consumer protection gap: while travel agents need to provide financial security in order to be accredited by IATA and while tour operators are required under European legislation on package travel to protect customers against their financial failure or the failure of a carrier, there is no similar protection against airline failure for customers with seat only tickets.
Existing legislation on air services requires that national authority monitor airlines’ financial standing and suspend their operating license if their finances are insufficient, but this may rather hasten a risk of bankruptcy if an airline cannot operate, and it does not address any of the adverse consequences for passengers when a bankruptcy has occurred.

In the wake of the economic crisis, airlines are announcing significant operating losses and are indicating that they see no sign of recovery. In this worrying situation and considering the long term challenges of air transport, ECTAA considers that it is urgent and indispensable to put in place a mechanism to protect passengers in case of airline failure.

The European Commissioner for Transport Mr. Antonio Tajani has recognised the importance of the problem and has announced earlier this autumn that the European Commission is working on a solution. ECTAA supports the urge expressed by the European Parliament to act swiftly to put in place an adequate protection mechanism.

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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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