MPs want airline ticket levy
Sat Feb 4, 2006 7:38 AM GMT
LONDON (Reuters) - MPs urged the government on Saturday to impose a levy on all passengers flying out of the country to cover them in case their airline collapsed.
Aviation Minister Karen Buck last year rejected a recommendation by the Civil Aviation Authority to add one pound to the fare of all outbound flights to replace the existing ATOL bonds tour companies hold to cover insolvency.
The House of Commons Transport Committee, in a scathing report, said Buck should reverse her decision, given that less than half of passengers would be covered by ATOL protection by 2010.
It said only one in ten travel insurance policies included cover for air carrier insolvency.
"There is no evidence of sound, or indeed any serious analysis underpinning the government's decision", the committee said.
"The government has taken the wrong decision to reject the CAA's case for the levy to finance the return journeys of passengers stranded by the collapse of their air carrier and to provide refunds.
"Meanwhile, the government is spending time embedding voluntary arrangements for repatriation which do not guarantee the stranded passenger a flight home and which are bound to be structurally fragile. This is an amateurish approach.
"An opportunity to improve consumer protection has been lost."
Under the ATOL scheme tour operators selling flights and holiday packages are required to lodge a financial bond which the CAA can use to recompense passengers if the operator fails.
But the increasing numbers of independent travellers buying flights directly from an airline are not covered by the scheme.
Big airlines such as British Airways and Ryanair had opposed the levy, saying it would mean their passengers would be subsidising compensation for travellers on less well-established carriers.
The Department of Transport said it did not believe that passengers should be compelled to protect themselves against the failure of an airline.
"There are many areas where insurance is wise but the government does not make it compulsory," said a DoT spokesman.
"The government will nonetheless consider carefully the Transport Committee report."
http://today.reuters.co.uk/news/news...OC_0_UK-TRANSPORT-BRITAIN-LEVY.xml
I think it's a good idea, are there any other countries that have this type of levy on tickets? What would happen to the millions of pounds that would be collected over a certain amount of years if it's not used?
Grimey
Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR
RE: British MPs Want Airline Ticket Levy
What a stupid idea. It is just another case of large well-run companies having to subsidize their poorly operated competitors. You don't get Burger King charging its customers £1 extra, to subsidize Mc Donalds, theyfore why should BA customers subsidize people who have chosen to fly on a less reputable company in case they go bankrupt.
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RE: British MPs Want Airline Ticket Levy
Thats ridiculous.
Its like a false economy.
Its like a false economy.
RE: British MPs Want Airline Ticket Levy
| Quoting B747-4U3 (Reply 1): What a stupid idea |
No it isn't. It's a sensible way to extend protection that is already provided to some airline customers to all airline customers.
| Quoting B747-4U3 (Reply 1): It is just another case of large well-run companies having to subsidize their poorly operated competitors. |
Is this a rant or based on some evidence you have?
| Quoting B747-4U3 (Reply 1): You don't get Burger King charging its customers £1 extra, to subsidize Mc Donalds, theyfore why should BA customers subsidize people who have chosen to fly on a less reputable company in case they go bankrupt. |
Childish comments like this show you know nothing about the issue that is being discussed. If Burger King goes bust its customers won't be stranded thousands of miles from home, so the analogy was poorly chosen.
RE: British MPs Want Airline Ticket Levy
| Quoting HS748 (Reply 3): If Burger King goes bust its customers won't be stranded thousands of miles from home, so the analogy was poorly chosen. |
Well said. However, instead of charging EVERYONE for the insolvency protection, just charge those airlines who do not have the protection. Make them contribute a percentage of the fare collected to a fund which will bail pax out in the event of an airline going bust. That will stop well run airlines having to subsiidise badly run ones.
But the final line is, if joe public wants cheap fares and is prepared to take the risk, he can hardly expect the rest of the world to help him.
Pay cheap. get cheap
Andy
Growing old is compulsory, growing up is optional
RE: British MPs Want Airline Ticket Levy
This should be required if an airline isn't part of a insurance or bonding scheme. The funds from such a fee could be used to purchase a policy or bond for those airlines or tour operators not part of a scheme. This seems to be the set up of this proposal.
Besides the UK, perhaps it should be enacted throughout the EC at a rate of 1 Euro per ticket or for any charter airline flight going into/out of the UK/EC. Perhaps we should doing this in the USA as well for all of our airlines, considering the financial cliff edge many are at. The fee could vary upon the risk that airline has of going bust. Insurance/bonding companies could set up the program by airline. That way, there would be protection for those who get stranded when they go into full shutdown (like Independence Air recently did).
Besides the UK, perhaps it should be enacted throughout the EC at a rate of 1 Euro per ticket or for any charter airline flight going into/out of the UK/EC. Perhaps we should doing this in the USA as well for all of our airlines, considering the financial cliff edge many are at. The fee could vary upon the risk that airline has of going bust. Insurance/bonding companies could set up the program by airline. That way, there would be protection for those who get stranded when they go into full shutdown (like Independence Air recently did).
RE: British MPs Want Airline Ticket Levy
| Quoting Grimey (Thread starter): It said only one in ten travel insurance policies included cover for air carrier insolvency. |
And the reason for this? Because very few airlines actually go bankrupt and abandon passengers at far flung destinations. It does happen, and when it does - other airlines often make the effort by offering standby seats for literally nothing, or confirmed seats for a nominal charge.
Why should governments get involved when there really isn't a problem. Insurance is available for passengers, if they want to reduce this perceived risk - buy why should I pay the insurance, in particular to inefficient civil servants, when I don't need it, or want it.
Just another bunch of politicians who want to get re-elected, by causing a scandal, when there really isn't one.
RE: British MPs Want Airline Ticket Levy
Lets look at the facts>If you buy a ticket from a consolidator then the CAA make them bond and provide cover for airline failure. If you buy a ticket from the airline direct no cover for money or repatriation...That seems a very even playing field. In addition if you buy travel and accommodation from one source then you have the full cover. If you buy a flight and then link from that website (invisably or not) to buy an hotel or car parking No cover. level playing field?
I cannot understand why there are so many bleatings about a pound when there are many other surcharges anyway This would mean a full refund of travel paid AND repatriation if you are stuck overseas when the airline ceases to operate...Personally I think it is a good idea but you have to be wary as the airlines want the "linked by web sites" to operate outside the present law without any bonding .For example the Ryanair site linked to a site that booked car parking. this company went bankrupt and customers lost money booking with Ryainair , so they thought.....Also it is no good saying that airlines will not cease to trade, even the most established, as it can happen to anyone. So I vote for a quid
I cannot understand why there are so many bleatings about a pound when there are many other surcharges anyway This would mean a full refund of travel paid AND repatriation if you are stuck overseas when the airline ceases to operate...Personally I think it is a good idea but you have to be wary as the airlines want the "linked by web sites" to operate outside the present law without any bonding .For example the Ryanair site linked to a site that booked car parking. this company went bankrupt and customers lost money booking with Ryainair , so they thought.....Also it is no good saying that airlines will not cease to trade, even the most established, as it can happen to anyone. So I vote for a quid
RE: British MPs Want Airline Ticket Levy
| Quoting HS748 (Reply 7): I doubt that's the reason - if the risk were as low as you claim then insurance comapnies would cover it as their risk of loss would be minimal. |
Not exactly. My point is that insurance companies perceive that there is little demand for such an insurance product. If that is the case why should I be forced to buy an insurance product that I don't need?
I would bet that 50-70% of the total payments would be caught up in administration. That isn't bang for the buck (or the pound)
RE: British MPs Want Airline Ticket Levy
| Quoting HS748 (Reply 3): If Burger King goes bust its customers won't be stranded thousands of miles from home |
Well they might be starving thousands of miles from home thou
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RE: British MPs Want Airline Ticket Levy
As if flying to/from the UK isn't expensive enough already. The cost for my recent "free" trip to the UK using miles was 141.89 USD in taxes.
RE: British MPs Want Airline Ticket Levy
| Quoting ANother (Reply 6): Why should governments get involved when there really isn't a problem. |
Because they need the money and promised not to raise taxes. It's not that long ago that a family of mother, father and two children could get the necessary passports to fly abroad for £38 (2 x £19). Now the cost is £170 (2 x £102 and 2 x £68) and it will probably rise again soon.
RE: British MPs Want Airline Ticket Levy
| Quoting B747-4U3 (Reply 1): What a stupid idea. It is just another case of large well-run companies having to subsidize their poorly operated competitors. You don't get Burger King charging its customers £1 extra, to subsidize Mc Donalds, theyfore why should BA customers subsidize people who have chosen to fly on a less reputable company in case they go bankrupt. |
It's not a stupid idea! BA and Ryanair are just as susceptible to bankruptcy as EasyJet or anyone else. I guess from your rant you never fly on LCC's, so think you are immune.
Who would have said 5 years ago that United, Delta and Northwest would all be bankrupt? One pound is hardly going to break the bank.
The alternative should be that all airlines selling tickets in and out of the UK should have to get an ATOL bond, just like travel agents/tour operators have to do.
RE: British MPs Want Airline Ticket Levy
| Quoting BigOrange (Reply 13): One pound is hardly going to break the bank. |
How many passengers travelled from UK airports last year? I think the airlines could use that pound more!
| Quoting BigOrange (Reply 13): The alternative should be that all airlines selling tickets in and out of the UK should have to get an ATOL bond, just like travel agents/tour operators have to do. |
Much better solution - but try implementing that for non-British airlines. I can hear the screams already!
Lets face it, passengers left high and dry, or without access to refunds through their credit cards is very (very, very!!!) rare. Consumers don't expect their goverment to protect them when they buy something (other than air transport) over the internet. So why air transport. Perhaps they should get rid of the ATOL completely - and let consumers that they need to be careful when buying air transport, just like they need to be careful buying an iPod over the internet or in a shop.
RE: British MPs Want Airline Ticket Levy
| Quoting Rdwootty (Reply 8): Lets look at the facts>If you buy a ticket from a consolidator then the CAA make them bond and provide cover for airline failure. If you buy a ticket from the airline direct no cover for money or repatriation...That seems a very even playing field. |
You are correct in what say about buying tickets direct from the carriers. The problem this dosn't address if non-Birtish carriers go bust you have no chance of recovering the money if you pay by credit card. Any protection needs to be Europe wide and not just the UK IMHO.
| Quoting HS748 (Reply 3): BA customers subsidize people who have chosen to fly on a less reputable company in case they go bankrupt |
BA have a pension defecit of £1.4 billion so they are not out of woods. With fuel prices current levels and excess capacity in the UK any carrier could go bankrupt.
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