AIR TRAVEL INSURANCE, or Bonding as it is termed in the industry, continues to be a controversial subject.
Last autumn the Government announced its decision not to proceed with the CAA”s recommendation to extend financial protection to all air travellers departing the UK.
Tour operators expressed concern that as a result they would continue to bear greater regulatory costs than their airline competitors and consequently the Government asked the CAA to consider whether the current system of bonding might be replaced with a less burdensome way of meeting tour operators' obligations to consumers.
In a consultative document the CAA now suggests a one off charge of ”1 per passenger, to replenish the Air Travel Trust Fund and for this fee to be used in the future to offer what is in effect an insurance.
Monarch”s Tim Jeans was amongst the first airline bosses to object to the idea, pointing out that product insurance is the normal responsibility of the purchaser.
”Why should airlines be treated any differently?” he said. The CAA is distributing its paper widely to the travel industry and to other interested parties and is asking for responses by 19 May 2006.
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