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Wednesday, 26 November 2014

Call for a free flight back home for stranded passengers in the event of EU airline bankruptcy!

The International Air Transport Association (IATA) announced in Brussels on 25th November 2014 a new arrangement to help passengers impacted by airline bankruptcy. It looks the action was initiated by IATA member airlines flying to and from the EU to avoid the threat of levying a permanent statutory fund to aid passengers in such situations. "The passengers left stranded in the rare and unfortunate event of an airline bankruptcy will be offered ‘rescue fares’ from airlines to ensure they can get home“ says Tony Tyler, IATA’s Director General and CEO. Unfortunately, the solution does not seem so much new. So called ‘rescue fares’ have been already offered by airlines to passengers impacted by airline bankruptcy for years... 

Then, what is the core of the problem?

The European Commission has estimated the proportion of total EU passengers affected by airline insolvencies is less than 0.07% for each year. In 2013, some 842 million passengers were carried by air in the EU-28. It means around 50.000 air passengers might be affected by airline bankruptcy every year. The risk to remain stranded far from home, with all its consequences (to pay another flight back home, to incur additional accommodation costs) and/or never be reimbursed for the part(s) of the journey not made is estimated at 12% of those passengers. It makes around 6.000 air passengers stranded far from home yearly. However, the impacts on each such passenger might be significant. For example the immediate costs for stranded passengers reached even €796 on average with failure of Air Madrid in 2007 (the carrier left numbers of passengers stranded in South America). The passengers who had not left yet and renounced to their trip lost €315 in average and passengers who decided to rebook lost €390 in average. In fact, of the passengers purchasing standalone tickets affected by insolvency over 2000 to 2010, 76% did not have any form of protection. It is high time for change. EU air passengers need greater protection and immediate help. Especially that passengers are entitled to these rights under Regulation (EC) No 261/2004, and the assistance relates primarily to enable them back home as soon as possible.

Therefore we emphasis the key fact. The insolvency of air carrier and the sudden suspension of its operations affect the passengers switching to services of other carriers. The passengers' demand on the specific routes does not disappear, does it? The passengers still continue to travel. Although they use services of airlines, with the most convenient option for traveling (on the same a similar route).

We argue
The European Commission takes finally legislative work to enforce EU airlines to provide with free transport back home to passengers with a return ticket issued by EU air carrier and that suddenly ceases operations due to insolvency or bankruptcy. This particularly difficult situation for passengers stranded at the airports needs to be resolved. In our call for action we refer both to interests of consumers, affected by the bankruptcy of the airline, and to social responsibility of business entities, which are part of the EU sustainable transportation system.

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