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Air Travellers (Travel Insurance)

Volume 19: debated on Monday 1 March 1982

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asked the Secretary of State for Trade if he has any proposals to extend protection of air travellers, other than those on package tours, in the event of the failure of the airline.


asked the Secretary of State for Trade if he will introduce legislation to provide protection for air travellers who buy tickets on airlines which become insolvent.

At present I have no plans to introduce legislation on these lines. This is a complicated and difficult problem involving as it does an international industry. However, as I am sure my hon. Friends will be pleased to hear, I have instructed my officials to review the position to see whether there is any practicable way in which protection could be given to the scheduled air traveller.

I welcome that move. Will my hon. Friend confirm that among the matters that his officials might take into consideration is the possibility of a small levy on each scheduled airline ticket to enable a fund to be created comparable with the one that was used in the recent Laker situation to protect people who have gone abroad on package tours? Would it also be within their orbit to take account of the possibility of a foreign airline failing, tickets for which having been purchased in the United Kingdom?

I thank my hon. Friend for his welcome for the important review. I assure him that all those points will be covered within it.

Does the Minister agree that it is not at all difficult to make such provision? Would it not be possible to introduce a bonding scheme along the lines of that operated by ABTA? Has the promise that Tiny Rowland made on television to meet the costs of scheduled air travellers been fulfilled?

The promise made by Mr. Roland Rowland was that he would pay the costs of scheduled tavellers if and when he was in charge of the air company. Perhaps I might ask the hon. Gentleman why the Labour Government did not introduce a bonding scheme. If he is baffled, I can give him the answer. It is an extremely difficult and intricate matter, involving foreign airlines. We shall certainly look at all the intricacies and difficulties in our review.

When making a booking no air taveller is likely to assume that he might lose his money as a result of a company's bankruptcy, so should not travel agents at least make the position clear to people booking tickets and provide them with an opportunity to take out insurance

That is an interesting suggestion. No doubt representatives of the travel associations will take it to heart.

Will the Minister reconsider what he said to the hon. Member for Norwood, (Mr. Fraser), as many hon. Members may feel that Mr. Rowland's promise was unqualified?

As I understand it, Mr. Rowland was saying what he would do were he ever in a position to be influential in the airline.

Will my hon. Friend ask his officials to look at the air travel reserve fund, which contains a large amount of money, to see whether some of that can be used to compensate people who, although not scheduled passengers, booked hotels through Laker as well?

The fund contains about £18·5 million. I shall have my officials look at the matter. There is a difficulty in making people who paid a surcharge when they were going on a package holiday pay for the problems of those going on scheduled tickets.