FTO calls for financial protection for all air travelers


“Airlines are facing difficult times with high and rising jet fuel prices, a global economic downturn, ever fiercer competition from and between the no frills carriers, and rising airport security costs,” said Andrew Cooper, director general of the Federation of Tour Operators. This follows IATA’s director general Giovanni Bisignani’s stark comments describing airlines as being in uncharted territory. Yet where is the financial protection for passengers at risk of losing money and being stranded abroad when airlines get into difficulties? Many Silverjet customers for example face applying as unsecured creditors to the airline’s adminstrator, while others who booked flights as part of a package will be protected.

Following a long drawn-out review, in April this year, the £1 per passenger Air Travel Organizors’ Licensing Protection Contribution arrangements began as a financial contribution used to pay for repatriation costs and refunds from the Air Travel Trust Fund for customers of any failed tour operator. The FTO argued strongly that the opportunity should be seized to widen the scheme to include customers of airlines, but regrettably this was rejected by the government following strong lobbying by some airlines. Events before and since have shown that airline customers badly need comparable protection to customers of tour operators, and in turn tour operators deserve a level playing field to compete fairly with airlines, given the increasingly blurred and irrelevant line between a ‘package’ and separate air and hotel bookings. Indeed, research shows that many airline passengers wrongly believe they already enjoy comparable protection to those on packages.

Andrew Cooper adds, “I suspect one reason why this logical extension of customer protection has been blocked is the lingering legacy of old-style, state-owned, national carrier airlines which sowed a mentality of bogus nationalism and the now quite erroneous belief that airlines don’t go bust. It is high time that our government and regulator urgently put in place proper protection for citizens and also set tour operators a level runway to ensure fair competition. Stranded families and financially disadvantaged travelers will neither forgive nor forget a government which waited for a major airline collapse before acting.”