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EU calls for airline insolvency protection

Published on 26 Nov 2009 under category: legal

Proposals have been drawn up which would see travellers who booked holiday tickets online protected, should their airline become insolvent.

A European review has suggested the implementation of a compensation fund that would pay out to those whose travel firm failed before their holiday.

It is thought that further details on a potential insolvency fund are expected to be announced by the European Union (EU) later today (November 26th).

Meglena Kuneva, the EU's consumer commissioner, is calling for the action to be taken to safeguard passengers as the airline industry is struggling during the economic downturn.

The commissioner said: "We need tough protection that gives all consumers booking a package holiday the peace of mind they deserve, and we need a level playing field so businesses compete on equal terms."

However, several airlines have moved quickly to dismiss the idea, saying that adequate measures are already in place to protect consumers.

Under the current system, passengers booking flights separately from their accommodation may be unprotected should their airline go bust.

If you require advice on Insolvency and Bankruptcy please call us on +44 (0)20 7831 0101 and ask for Katherine Sillett.