EU Commission Urged to Introduce Passenger Protection Scheme Against Airline Insolvency

EU Commission to introduce a duty on airlines to provide financial guarantees covering their liabilities to passengers in the event of insolvency, through its initiative for better protection of passengers and their right.

In a letter issued by eu travel tech, it is stated that the responsibility should be on the airlines to cover the risks arising from their activities, AtoZSerwisPlus.com reports.

The same emphasises that regarding the misaddressing of companies, neither consumers, taxpayers, nor package guarantee providers should be held accountable, but rather the airlines.

The letter also highlights the fact that in recent years, the sudden disappearances of airlines have multiplied, which is also not a rare phenomenon. A study conducted by the EU Commission in 2020 reveals that during the period 2011-2019, 87 airlines went bankrupt, thus affecting 5.6 million consumers.

According to EU travel tech, the fallout from the pandemic crisis put airline finances under additional pressure. Considering this fact, analysts are still worried about airline bankruptcies or severe liquidity issues in Europe in this uncertain time.

Further, the co-signatories of the letter add that to protect all actors affected by an airline’s bankruptcy, a mandatory bankruptcy protection mechanism must be introduced in the airline sector.

According to them, as far as the Member States, consumers, and taxpayers are concerned, other measures include encouraging consumers to buy travel insurance or appointing dedicated national authorities dealing with repatriations to correct interruptions and financial losses caused by airline bankruptcy.

In this regard, ECTAA Secretary General Eric Drésin emphasised that for a long time, travel agents and tour operators have supported the introduction of bankruptcy protection obligations for airlines to the existing commitments in the Package Travel Directive.

“The PTD can be a source of inspiration, as the Commission can take the example of the guarantee fund set up for years in Denmark,” he also pointed out.

Whereas the General Secretary of the eu travel tech EU, Emmanuel Mounier, highlighted that in addition to the creation of mandatory bankruptcy protection for airlines, the supervision of the licensing of EU air carriers should also be strengthened.

He also explained that more robust monitoring should only replace the need for mandatory airline bankruptcy protection.

Throughout last summer, passengers from the EU countries were able to seek compensation from airlines if they were subject to flight cancellations or delays. Passengers were allowed to receive between €250 and €600 depending on the direction of the scheduled arrival time and the time the plane arrived at a specific destination.