One in 200 passengers will be affected by airlines going bust over the next 15 years: that is the prediction of an interim report by the Airline Insolvency Review.
By the end of that spell, says the interim report, a typical airline failure could affect nearly 900,000 passengers, compared with half a million today – roughly the number caught up in the Monarch collapse.
“This increase in affected passengers is driven by passenger demand growth and increasing insolvency risk,” says the report.
Peter Bucks, the chair of the review, said the failure of Air Berlin at roughly the same time as Monarch in the UK, was treated very differently: “The German government chose to provide immediate financial support to keep the airline temporarily running through administration.
“Two insolvencies with two different responses. Both managing to avoid thousands of passengers being left to fend for themselves, both costing the taxpayer significant amounts of money.”
His report says there is no “one-size-fits-all” solution to repatriating passengers in the aftermath of an airline failure. Passengers booked on a small airline that collapses outside the summer peak might be able to be absorbed by existing carriers, but larger UK airlines would need to be kept flying in administration to ensure passengers are able to get home in a timely fashion.
The review envisages: “A temporary moratorium to prohibit suppliers and other creditors from withdrawing services, demanding payments, and restrictions on enforcing security over an airline’s property during a short repatriation period.”