Collapse highlights need for reform

Industry bodies will use the collapse of budget carrier EUJet to further pressurise the government to shake-up the ATOL regulations.

The Federation of Tour Operators, ABTA and Civil Aviation Authority will point to the failure to highlight the critical importance of extending consumer protection to scheduled and low cost airlines.

Lobbying of MPs will now unashamedly focus on the failure.

EUJet flights from Kent International Airport in Manston were grounded after shares in its parent company, PlaneStation, were suspended on Monday. It followed the withdrawal of support from its bankers after the company admitted the projected number of passengers for the year would fall below expectations.

PlaneStation has since called in the administrators and admitted the “directors do not anticipate that the administration will result in any return to equity shareholders.”

The EUJet website – describing itself yesterday as the ‘hassle free alternative’ -said this morning it has ceased all operations and flights “due to circumstances beyond our control.”

It is unclear exactly how many passengers are stranded overseas but is thought to be close to 10,000. Destinations served by the airline included Amsterdam, Belfast, Dublin, Edinburgh, Malaga, Faro, Murcia and Prague.

The number of forward bookings also remains unclear but with the airline taking around 35,000 bookings each month, a conservative estimate is 50,000.

One passenger due to fly home from Malaga told the BBC: “We are stranded and at a loss to know what to go.”

ABTA president Martin Wellings said: “We have been lobbying for many years for consumer protection to be extended to cover the failure of scheduled airlines. This failure regrettably underlines the need for government to extend this protection urgently.

“This failure is very frustrating and disappointing for travellers.”

FTO director general Andy Cooper said the collapse strengthens the argument for new legislation.

“Any failure is bad for the industry,” he said. “But our message to the government has always been that something like this was inevitable. It was only a matter of time.”

Cooper also doubted claims from PlaneStation that customers with forward bookings will be refunded.

“I estimate they are holding around £4.5 million of customer’s money. Passengers have more chance of being struck by lightening than being refunded,” he said.

CAA deputy director for consumer protection David Moesli said the government must now sit up and take notice.

“This is an example of what happens when there is no financial protection,” he told TravelMole. “People look forward to going away and if, in the middle of their holiday, their airline collapses they are left stranded. They may have to wait for a couple of days for a seat back home and, particularly in the case of families, it will be expensive.”

With no other carrier operating to Manston, passengers will suffer additional expense by trekking back to Manston to pick up cars parked at the airport.

With Parliament in recess, the Aviation Bill will not receive a third reading until October 10 – the day MPs return from their lengthy summer break. It will then go to the House of Lords for ratification.

Cooper said amendments to the bill can be made at either of these stages.

Report by Steve Jones