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September 2022, Virtual
September 29 2022, Virtual
Two important pieces of possible legislation saw the light of day last week. A consultation on how and when regional air services to London should be protected by Government was launched by the Department for Transport (DfT) and separately the influential House of Commons Transport Committee has come out with a report that highlights the fact that passengers on scheduled services are not, in the main, protected from an airline collapse, unlike their fellow travellers who take package holidays, the majority on charter flights.
In the Future of Air Transport White Paper, published in December 2003, the Government said it would consider imposing Public Service Obligations (PSOs) in certain limited circumstances. This would guarantee a minimum level of air services on existing routes from UK regional airports to London and would allow landing and take off slots at congested London airports to be ring-fenced for those services. The consultation seeks views from UK residents, regional bodies, the aviation industry and other interested organisations on what criteria they think should be used to allow this to happen. Aviation Minister Tony McNulty made it clear in a statement that the Government recognises the importance of regional air services and the concern about the availability of slots at London airports.
”We are committed to clarifying the circumstances in which it may be appropriate for Government to intervene, so as to provide a firmer basis for the discussion of individual cases with both airlines and regional interests," he said. In other words Downing Street recognises the importance of the regional services into London but significantly in its statement talks about Heathrow, Gatwick, Stansted, London City and Luton. The regions of the UK are quite frankly only interested in Heathrow, the world”s busiest international airport. What is sad is the statement makes it clear that any ring fencing is not retrospective. It seems that the horse has already bolted in terms of LHR for East Midlands, Humberside, Inverness, Liverpool, Newquay, Norwich, Plymouth, Guernsey, Jersey and the Isle of Man, all routes lost in the name of slot acquisition. And the same goes for other regional airports who might wish to be linked to the capital”s major airport. However Aberdeen, Belfast and Newcastle, names suggested for a cull, might well be saved.
The Transport Committee recommendations come in advance of advice to the Government due soon from the Civil Aviation Authority which manages the ATOL scheme. A new air travellers' protection scheme could cost passengers up to ”2 per ticket but this is MPs views and not in the real world. Fifty pence per passenger has also been noted and whilst easyJet has been the only airline, to date, to come out against the scheme the cost of the ATOL undertaking is lost in the overall business of a tour operator. Yes money is spent but is difficult to quantify. It is a hidden charge. The ATOL works on a Bond. Something along the same lines could be organised for the airlines.
The recent failure of Duo has highlighted the problem. In fact nine European airlines have failed since September 2001 and more could go under this summer although with the change into direct booking even airlines that are loss making can have cash piles. When Ryanair picked up the unsuccessful Buzz operation last year it also collected revenues paid in advance sitting in the bank.
Progress on this one is likely to be slow. The CAA are not likely to make its recommendations to Government for some time, the Department for Transport will want to look at it, and of course it will finally go to Cabinet. Added to that EU considerations need to be made.
Our recommendation is to make sure you have adequate all year round travel insurance. That way if you fancy a quick trip (or decide to book a long way prior to your flight) at least you are covered. You don”t have to think about it and assuming you go to a reputable company a reminder will follow year after year (after year). It is worth mentioning that credit card purchases of over ”100 are only covered for insurance, so many airline tickets nowadays do not fall into this category.