BRITS may have to pay 50p extra on each flight under future proposals to protect against airline collapses.
The Transport Secretary said he is considering a new “Flight Protection Scheme” forcing airlines to shore up funds to cover overseas passengers in the event of an airline going bust.
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The proposal follows the collapse of Thomas Cook last month, which left 150,000 tourists stranded.
Taxpayers had to foot a huge bill for the Civil Aviation Authority (CAA) to fly holidaymakers home in the biggest British repatriation since World War Two.
Writing to the Transport committee, Minister Grant Shapps said: “I am determined to bring in a better system for dealing with airline insolvency.”
“The proposal for a new “Flight Protection Scheme” would require airlines to purchase risk based securities to cover the majority of their exposure, with a flat levy to fund the scheme’s running costs and reinsurance, costing c.50p overall per UK originating passenger not already covered by ATOL protection.”
“We are considering these representations in light of concerns around risk assessment, proportionality and deliverability.”
It’s not the first time that the scheme has been reported on. In May, the Department for Transport suggested that it was looking at a way to fund airline collapses.
Earlier this week, the government revealed it is looking at a new law to help protect airlines from going out of business.
Passengers are currently only protected against airline collapse if they book flights as part of a package holiday, which is protected by ATOL, or with travel insurance that offers the cover.
Flight-only bookings are not ATOL-protected.
Mr Shapps added he would prioritise the new law allowing flight operations to continue in insolvency.
The new rules would force collapsing airlines to prioritise flying home stranded passengers over duties to creditors and would give the CAA more oversight over struggling airlines.
A Department for Transport report in March found passengers expressed concerns about being left stranded abroad, and would be “willing to pay more for their tickets to be sure they will be able to get home in a timely way, at little or no additional cost.”
Thomas Cook passengers may be able to get their money back for extra costs paid during the collapse.
The travel firm went under after repeated setbacks and competition from online services saddled it with a huge deficit.
British Airways boss Willie Walsh has warned more airlines could fail in the coming months amid fierce competition and sky-high fuel costs.
