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Silverjet”s collapse has again highlighted the need for consumers to be protected against scheduled airline failure, an air travel watchdog has warned.
The all-business class carrier went bust in May, leaving 7,000 UK passengers and 2,500 overseas customers without flights.
Among the UK passengers, 4,000 mainly business travellers were unable to get refunds because they booked direct with a scheduled airline. The remaining 3,000 will get their money back because they booked packages of flights and accommodation, which are protected under the Air Travel Organisers Licence (ATOL) scheme, or because they had bought through another ATOL holder.
In its annual report, the watchdog Air Travel Insolvency Protection Advisory Committee (ATIPAC) concludes: ”The discrepancy in the financial protection available to airline passengers was clearly demonstrated by the failure of Silverjet.”
Other passengers were similarly affected by the collapses of Eos, Maxjet and Hong Kong Oasis Airlines, which came two years after the government threw out CAA plans for a ”1 levy to fund financial protection for all flights leaving the UK.
Credit cards do provide cover for tickets costing over ”100, but do not cover other costs like accommodation. Debit cards give no cover. The only current alternative is Scheduled Airline Failure Insurance (SAFI), which is mainly offered as part of general travel cover.
A survey of airline websites by ATIPAC found that SAFI was offered on only four of 11 major airline and eight no-frills airline websites, all of which included it as part of general cover.
”You can buy SAFI independently, but you have to go and look for it and know about it in the first place,” said a CAA spokesman.
The CAA warns that SAFI does not cover airlines that have sought bankruptcy protection and can be withdrawn from carriers at short notice if insurers believe they are risky.
ATIPAC”s report is published amid record oil prices and concerns that many scheduled airlines will collapse. It points out that since the start of Open Skies in March there are potentially 7,000 extra seats a day from Heathrow to the US and warns: ”The effect of this expanded capacity remains to be seen.”