Consumer watchdog steps up pressure for passenger protection

Consumer organisation Which? has called for urgent action by the government to close a loophole in passenger protection in the wake of the latest budget airline collapse.

As reported, Polish no-frills airline Air Polonia, which operated a network of flights from Stansted, ceased operations on Sunday standing 53,000 passengers with advance bookings over the winter.

The airline flew from Stansted to Warsaw, Katowice, Poznan, Gdansk, Bydogoszcz and Szczecin.

Air Polonia, which had only been flying for a year, is sixth airline casualty in Europe this year following Italian low fares carrier Volare, Dutch airline V-Bird, Jet Magic from Ireland and UK carriers Duo and Now.

Which? has joined the Association of British Travel Agents (ABTA) and Federation of Tour Operators (FTO) in voicing concern about the absence of financial protection for passengers using no-frills airlines.

Scheduled airlines – including low fare carriers – are not obliged to offer any form of cover against financial failure. However, charter airlines and tour operators must provide financial bonds to the Civil Aviation Authority under the Air Travel Organisers Licence (ATOL) scheme to safeguard against financial failure.

The government admitted last month that legislation was unlikely to be in place until the end of next year despite call a call from the CAA in July for ATOL protection to be extended to scheduled airlines.

Mike Pedley, senior project officer at Holiday Which?, said: “The bottom line is that scheduled airlines – whether they are well-established carriers like British Airways or budget airlines like Air Polonia – are not required to provide financial protection or ‘bonding’ to ensure that people get refunded or taken home if they go bust.

“The rash of low-cost airline failures over the last year or so has highlighted this loophole in consumer protection, which must be closed.

“The government is talking about imposing new rules by the end of 2005, but this situation needs to be addressed far more urgently, certainly before next summer.”

A recent MORI poll of more than 700 people for ABTA found that 32% of people had taken at least one no-frills flight in the last 12 months.

Eight out of 10 people agreed that it would support a levy of between 50p and £2 per ticket to ensure financial protection against airline failure.

EasyJet has joined SkyEurope in offering to assist stranded Air Polonia passengers.

The UK no-frills airline is offering free seats for passengers who were due to fly until December 20 on routes from London to Warsaw or Karkow. They will only be required to pay £11 in taxes and charges.

EasyJet chief executive Ray Webster said: “The aviation industry is a highly competitive market and, as airlines reduce fares to compete for passengers, the failure of those airlines without a low cost base is inevitable.

“The market will determine how many airlines it can sustain, but with its low cost base, well-established route network and strong financial position, EasyJet can reassure consumers that it will survive and prosper.”

Report by Phil Davies