Airline passengers could be charged 50p every time they fly to help pay for stranded passengers to come home when an airline collapses.
The 'Flight Protection Scheme' was proposed in a Department for Transport (DfT) report today, which was commissioned by transport secretary Chris Grayling in the wake of the collapse of Monarch Airlines in October 2017.
The airline’s collapse saw the repatriation of 85,000 stranded customers. The government intervened at the time and ordered the Civil Aviation Authority (CAA) to help repatriate British passengers stuck abroad.
The DfT also recommends changing the rules around UK airline insolvencies to allow the airline’s own planes to be used to repatriate those trapped overseas.
It also wants to work to ‘improve awareness’ among passengers of safeguards, such as travel insurance, to protect future bookings when airlines fail.
Peter Bucks, chair of the review, says: “We know passengers expect to be protected from being stranded overseas if their airline should collapse, but in practice, each year many people fly without any such protection.
“Although airline insolvencies are relatively rare, as we have seen in recent months they do happen – and at times have required government to step in to repatriate passengers at great cost to the taxpayer.
“Our recommendations to government set out a series of practical suggestions to ensure that passengers are protected, particularly in the event of a large-scale collapse like Monarch.
“Ensuring all passengers can get home requires organisation, funding and in many cases more than simply rebooking onto other flights.”
Mr Grayling comments: “I welcome the report and I am grateful for the work performed by Peter and his team.
“We will now consider the range of options put forward by the review, and will work to swiftly introduce the reforms needed to secure the right balance between strong consumer protection and the interests of taxpayers”.
What to do if the airline goes bust while you're abroad
If you’re abroad and stuck now that your airline can’t fly you home, check other flight prices returning to the UK from your destination’s airport.
In some cases, certain airlines offer ‘rescue fares’ to passengers of bust airlines, essentially flights at a reduced cost.
If you bought your flights with a credit card and the value was over £100 you will be protected by Section 75 of the Consumer Credit Act.
This gives you entitlement to protection from your credit card company. You’ll need to get in touch with them to obtain a refund.
Flights booked directly with the airline won’t have ATOL protection, but if you booked the flights as part of a tour or bigger package, your tour operator will likely have ATOL protection.
Check your booking, you would have been sent an ATOL protection certificate.
If you booked flights through a 3rd-party website, speak to them directly in the first instance to see if you can get a refund.
You may be able to claim back for the failure of the airline on your travel insurance. This is known in the policy as scheduled airline failure insurance or SAFI.
However, this is not necessarily standard cover on all travel policies. Check your cover Ts&Cs and get in touch with the provider to see if you are protected.
If you’ve got hotels, car hires and other activities booked as part of your holiday that you now can’t access, check to see if you are able to cancel them before paying any money.
Check your travel insurance too as these may be covered as ‘consequential losses’ as a result of the failure of the airline.