The move is designed to give passengers certainty they will be able to return home without delay in the event of business running into financial problems. It follows the Government’s £100million airlift operation to fly home 140,000 stranded Thomas Cook customers last month. Ministers insist the plans will also reduce costs for taxpayers by minimising the need for the Government to coordinate extensive air-lift operations to help holidaymakers stranded overseas return.
Transport Secretary Grant Shapps said: “We’ve recently seen the huge impact airlines collapsing can have on passengers and staff.
“To bring over 140,000 Thomas Cook passengers home, the Government and UK CAA (Civil Aviation Authority) worked together round the clock and, with the support of people across the globe, carried out the biggest peacetime repatriation exercise in UK history.
“I’m determined to bring in a better system to deal with similar situations in future, helping ensure passengers are protected and brought home quickly and safely.
“I’ve personally spoken with Peter Bucks, the chairman of the Airline Insolvency Review, and plan to draw on his expertise and bring in airline insolvency reforms as quickly as possible.”
Thomas Cook ceased trading on September 23 after the company was unable to pay £200million to creditors.
The travel firm’s collapsed sparked the largest peacetime repatriation since the Second World War to bring back 150,000 passengers stranded abroad.
Earlier this week, the travel firm Hays stepped in to buy Thomas Cook.
Whitehall officials say the episode exposed the complexity and cost of repatriating passengers.
A similar operation, costing taxpayers millions of pounds, was carried out when the Monarch airline collapsed.
Officials argue that using an airline’s existing assets and staff in order to get people home will help to cut the costs of repatriation efforts.
The proposed legislation follows the Government’s Airline Insolvency Review, which looked at what steps could be taken to better respond to the collapse of airlines in the future.
