21 OCTOBER 2019
© 2022 Business Travel News Ltd.
With a government that has as many leaks as the Titanic after it hit the iceberg, maybe someone somewhere got it wrong and leaked what turned out not so much a false story but one that promised so much but was a damp squib.
Before the Queen’s Speech, word on the street was that legislation would be published promising that the problems and costs associated with the Thomas Cook fiasco could be averted in future. The German government managed to de-escalate the collapse of Air Berlin. But here, perhaps someone, somewhere had remembered that that airline was originally conceived to be the home carrier at Willy Brandt International Airport (which we are told is finally on its way?). Perhaps a government with a conscience.
It may be that someone in Whitehall had read BTN’s words from the issue of 30 September.
“Overriding the whole concept (of flying on) is the question of insurance.
Without insurance, nobody flies.
Without insurance, the UK Civil Aviation Authority (CAA) will not allow an Air Operators Certificate and Operating Licence to be retained.
And the CAA will not allow an AOC unless it is for a “fit for purpose” operator.
We will not go into the myriad of requirements for an Operating Licence and AOC but essentially an airline needs aircraft (and the ownership may be in dispute), aircrew, engineering certification, airport clearance and fuel and catering.
Then it needs a ground a ground handling agent, weather and en-route navigation and a management team able to pull together all the elements of a flight. Airports dealt with and aircraft owners required to release grounded aeroplanes that they have a lien on.
Everyone would have required guaranteed payment. Sad to say Thomas Cook Airlines was insolvent.”
Will the government act as guarantor?
These are the words of the Queen’s Speech, page 87/88.
AIRLINE INSOLVENCY LEGISLATION.
The purpose of the legislation would be to:
● Protect passengers in the event of an airline going bust by reforming the insolvency process.
The main benefits of the legislation would be:
● Making sure the industry can get passengers home quickly and effectively if and when an airline goes bust. This will balance strong consumer protection with the interests of the taxpayer.
The main elements of the legislation are:
● Enhancing the Civil Aviation Authority’s regulatory powers to improve oversight of airlines in distress and mitigate the impacts of a future failure.
● Reforms to airline insolvency, so as to strike a better balance between strong consumer protection and the interests of taxpayers.
● Extending the Civil Aviation Authority’s existing remit to apply to therepatriation of both ATOL and non-ATOL protected passengers.
● Establishing and enhancing a repatriation ‘toolkit’ of mechanisms for companies and passengers, including:
○ The Civil Aviation Authority's ability to grant a Temporary Airline Operating Licence for an airline to continue repatriating passengers following insolvency.
○ The introduction of a special administration regime for airlines and tour companies to support the needs of passengers post-insolvency and to keep aircraft flying long enough for passengers to be repatriated.
Territorial extent and application
● The legislation’s provisions would apply to the whole of the UK. Civil aviation
and insolvency are reserved matters.
● The aviation sector directly contributes at least £22 billion to the UK economy each year, supporting around half a million jobs right across the country.
● ATOL was set up in 1973 to protect UK consumers when they purchase a holiday including a flight. It ensures they will receive a refund or be brought home if the company they purchase from goes out of business. It protects over 20 million holidaymakers each year.
● The Review was published in May 2019 and was consulted on until June 2019. The Review is clear there is no ‘silver bullet solution and that implementation could consider a transition period to allow industry to adapt to changes.
Make what you will of that. The public requires satisfaction that a Thomas Cook Airlines situation will not happen again, and so does The Treasury. And what happens if a foreign carrier were to collapse with a portfolio of British passengers? IATA says 50 airlines have failed this year, some very small. Let us hope that the Department for Transport can quickly set up simpler procedures in case of future airline failures.
The Queen's Speech
All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum
John Jones, Great Britain
Gosh - suppose a large low cost scheduled operator based in the UK were to run out of cash. Would make Thos Cook look like a walk in the park repatriationwise !