200 passengers will be affected by airlines going bust over the next 15 years, that is the prediction of the Airline Insolvency Review, set up after the collapse of Monarch last October. By the end of that spell, says the interim report, a typical airline failure could affect nearly 900,000 passengers, compared with half a million today– roughly the number caught up in the Monarch collapse.
“This increase in affected passengers is driven by passenger demand growth and increasing insolvency risk,” says the report.
Peter Bucks, the chair of the review, said the failure of Air Berlin at roughly the same time, was treated very differently. The German government chose to provide immediate financial support to keep the airline temporarily running through administration. His report says there is no “one-size-fits-all” solution to repatriate passengers in the fallout of an airline failure. Passengers booked on a small airline that collapses outside the summer peak might be able to be absorbed by existing carriers, but large UK airlines would need to be kept flying to ensure passengers are able to get home in timely fashion.
In the event of a failure, aircraft leasing firms demand the return of their planes and ground handlers. The Monarch collapse revealed widespread confusion over consumer protection. Mark Tanzer, CEO of ABTA, the travel association said: “ABTA has been highlighting for some time that the lack of any formal protection arrangements for scheduled flights leaves many passengers at risk.