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GOVERNMENT PASSING THE BUCK ON PROTECTING AIR PASSENGERS FROM AIRLINE BANKRUPTCY - BRAKE

October 10, 2005 2:07 PM

Tom Brake MP, Liberal Democrat Shadow Transport Secretary, will today criticise the

Government in the House of Commons debate on the Remaining Stages of the Civil Aviation Bill for their statement today by Transport Minister Karen Buck which has rejected the Civil Aviation Authority's plan to place a £1 levy on all air flights to provide passenger security against airlines going bankrupt.

Commenting, Tom Brake MP said:

"I simply do not understand why the Government have failed to back this idea, particularly when it is being proposed by no less an authority than the Civil Aviation Authority, and has the backing of Federation of Tour Operators. Their statement today really is a case of passing the buck on the financial security of air passengers.

"The introduction of a levy such as this on all ticket sales would benefit passengers by offering financial protection on all flights, and would also have a positive deregulatory impact. The travel industry estimates a saving to tour operators and travel agents of up to £100 million a year.

""Under present arrangements around 84million passengers currently fly without adequate insurance - the equivalent of 670,000 full 737s. It is clear therefore that the current system no longer works and will have to be replaced.

"I will be asking Ministers during debates in the House today on my amendment to bring in such a levy, to give some very clear answers as to what they will be proposing to do instead, something Transport Minister Karen Buck's statement today has failed to do. Air passengers left stranded the next time an airline goes bust will certainly ask why Ministers did nothing to act."

ENDS

In the late 1990s, as much as 98% of air leisure travel originating from the UK was ATOL protected

Latest CAA figures show that 44% of all airline passengers do not have any type of protection in place in the event of an airline failure - around 84 million passengers - enough to fill around 670,000 Boeing 737-700 aircraft. This equates to 1826 flights a day, or one flight somewhere every 47 seconds.

This summer two airlines have collapsed leaving 12,000 holidaymakers stranded in Europe due to the collapse of EUjet and 400 passengers stranded in Pakistan due to the failure of the airline Swe Fly. A further 100,000 are likely to lose money they have paid in advance. (http://www.fto.co.uk/resources/latest_news/index.php?newsID=29&b=519)

Amendment Tabled by Tom Brake MP

Clause 9, Page 11, Line 46, at end insert -

(3) For the purposes of this Act, every air passenger departing from an aerodrome in the United Kingdom shall be deemed an air travel organiser.

(4) The only contribution to the Air Travel Trust that air passengers shall be required to make is set out in Section 71C below

Clause 9, Page 11, line 46, at end insert -

71C Contributions by air passengers to Air Travel Trust

(1) There shall be a levy to be known as the Air Passenger Levy which shall be charged in accordance with this section on the carriage on a chargeable aircraft of any chargeable passenger

(2) Every passenger on an aircraft is a chargeable passenger for the purposes of this section if his flight begins at an airport in the United Kingdom

(3) The air passenger levy shall be charged on the carriage of each chargeable passenger

(4) The Secretary of State shall set the rate of the charge for each chargeable passenger by regulation.

(4) The Secretary of State may by regulations make provision for and in connection with requiring operators of aircraft to pay the air passenger levy to the Air Travel Trust

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