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£1 levy plan thrown out by government
Plans to create a £250 million passenger protection scheme through a £1 levy have been rejected by the government.
Despite intensive lobbying by the travel industry in favour of the Civil Aviation Authority plan, the Department for Transport threw out the proposal.
A statement said: “The government has decided not to implement the CAA’s recommendation for a £1 levy. The attractions of the CAA scheme are outweighed by the disadvantages.”
According to Reuters, the department said it did not believe a compulsory scheme was appropriate, adding that the government did not organise refund schemes for other industries such as retail, building or financial services.
The decision will be a bitter blow to organisations such as ABTA, AITO and the Federation of Tour Operators who had backed the CAA.
But airlines such as easyJet and British Airways welcomed the move saying there was never justification for such a measure.
EasyJet chief executive Ray Webster said: “Let’s keep governments out of the airline industry. Governments should define the standards and monitor that airlines conform to those standards but it should let the industry find the best way of meeting those requirements.
“The government has acted in the consumer interest with its announcement today. EasyJet will continue to fight for lower fares for all passengers.”
Flybe sales and marketing director Mike Rutter said: “We are delighted that the government has upheld the principle that passengers should have the freedom to choose whether to take out insurance and decide which type of cover is appropriate for their independent travel plans and not be dictated to by a ‘nanny state’.
“It is patronising to these mature consumers to compel them to pay a state imposed levy when they have the opportunity to buy this product in the free market.”
*More industry reaction to come
Report by Phil Davies
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