Montserrat Barriga, ERA’s Director General.
IATA highlights that according to the European Commission, between 2011 and 2020, some 0.07 per cent of flight-only (as opposed to package travel) passengers would be affected by air carrier insolvency.
ERA (European Regions Airline Association) fully agrees with and supports the position IATA has released in response to some governments considering new rules to address airline bankruptcy, such as the creation of a fund for repatriating or refunding passengers.
Airline insolvencies are rare. IATA highlights that according to the European Commission, between 2011 and 2020, some 0.07 per cent of flight-only (as opposed to package travel) passengers would be affected by air carrier insolvency. In addition, only 12 per cent of the 0.07 per cent initially impacted (or 0.0084 per cent of the total number) would be stranded abroad and in need of repatriation.
There are enough mechanisms in place today that ensure passengers are looked after and returned home in the rare occurrence of an airline ceasing operations.
Creation of a fund would decrease the competitiveness of airlines and increase costs for European consumers. There are numerous means for passengers to obtain a refund for their airline tickets (via credit card, insurance on credit card or via direct insurance with the airline, travel agency or tour operator). Additionally, travel agents are protected through IATA’s Billing and Settlement Plan, with refunds coming from the settlement between travel agents and IATA.
ERA agrees with IATA’s recommendation of a review into existing bankruptcy laws to permit the continued operations of airlines in insolvency, allowing more passengers to complete their travel, and to consider increased priority for passenger refund claims.
Montserrat Barriga, ERA’s Director General says: “ERA fully supports IATA’s position. The aviation industry has an extremely strong track record in dealing with the repatriation of stranded passengers. The amount of passengers affected compared to the actual total number of passengers carried does not justify the creation of this fund. We consider that specific and more restrictive measures for airlines would be discriminative compared with other means of transport and would also penalise the financially prudent airlines. Aviation sector plays a critical role in the European economy, creating wealth and jobs, and further regulation such as the creation of a fund risks unintended consequences, including making travel more expensive and distorting competition in the marketplace.”
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
