UK: Insolvent airlines to fly passengers home under new insolvency rules

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UK: Insolvent airlines to fly passengers home under new insolvency rules
The move follows the collapse of Thomas Cook last month.

(SKY NEWS) — Planes belonging to insolvent airlines will be able to continue flying and bring holidaymakers home under new regulations to be introduced by the government.

The move follows the collapse of Thomas Cook into compulsory liquidation last month, which left 140,000 passengers stranded while the companies planes were grounded under strict insolvency rules.

The Civil Aviation Authority launched its largest ever repatriation operation using planes from other providers – at a cost to the taxpayer of around £100m.

The collapse of Monarch Airlines in 2017 saw 80,000 passengers stranded in similar circumstances, with a repatriation cost of £50m.

Under the new legislation, likely to be included in the Queen’s Speech on Monday, insolvent airlines will be placed in “special administration”, allowing them to bring passengers back to the UK.

The move comes after Peter Bucks, author of a review into airline insolvency, told Sky News the government should adopt the findings of his report – and suggested other airlines could fall victim to challenging market conditions.

Several of Mr Bucks’ other recommendations, including airlines pay a small compulsory levy of around 50p per passenger to help fund repatriation efforts, have not been included in this legislation.

Thomas Cook was among a number of airlines that actively lobbied against this proposal, arguing that it would put UK carriers at a competitive disadvantage.

Department for Transport sources said the proposals may be considered in future.

Transport Secretary Grant Shapps said: “We’ve seen recently the huge impact airlines collapsing can have on passengers and staff.

“To bring over 140,000 Thomas Cook passengers home, the government and UK Civil Aviation Authority worked together round the clock and, with the support of people across the globe, carried out the biggest peacetime repatriation exercise in UK history.

“I’m determined to bring in a better system to deal with similar situations in future, helping ensure passengers are protected and brought home quickly and safely.

“I’ve personally spoken with Peter Bucks, the chair of the Airline Insolvency Review, and plan to draw on his expertise and bring in airline insolvency reforms as quickly as possible.”

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