Collective Commentary about the New Package Travel Directive

ARTICLE 3 | MARC MC DONALD 161 between 2000 and 2010 22 affecting an estimated 1.4m – 2.2 m passengers 23 . “Of these, 12% were stranded away from home … We estimate that stranded passengers incurred the highest immediate costs resulting from airline insolvencies, of €796 on average.” 24 . The Study canvassed various options to provide the necessary passenger protection. It concluded that the two most feasible options for dealing with airline insolvency in terms of impacts on consumers and businesses were ‘general reserve funds’ made up of passenger contributions or compulsory insolvency insurance. Thought this latter option might be unfair on financially weaker airlines who could find the cost of the insurance prohibitive 25 . The EU Commission has not accepted the latter option. It has accepted that something needs to be done: “in this context, especially for flight-only ticket holders, it is important that passenger protection be enhanced.” 26 . However, instead of proposing a mandatory security obligation, it stressed that current EU laws should be better used by MS to prevent airline insolvencies and ameliorate the impact of any insolvencies. It highlighted that when flights are delayed or cancelled due to airline insolvency air passenger rights of care and assistance still apply. The EU Commission suggested that planning to honour these rights should be included in an airline’s business practise. It also promised to promote other soft initiatives – formalising ‘rescue fare’ agreements with other airlines, engaging with airport associations to formalise complimentary arrangements, promoting wider use of certain types of passenger insurance 27 – for dealing with the consequences of airline insolvency. It would review the positions in 2014 and decide whether legislative proposals are needed 28 . The reluctance of the EU Commission to propose legislation obliging airlines to provide insolvency security for their passengers stands in sharp contrast to the Commission’s support for imposing similar obligations on LTA facilitators and prompts the question – why? The evidence of consumer harm arising from airline insolvency is arguably comparable to the evidence of consumer harm 22 Ibid, Executive Summary of Final report, p 8. 23 Ibid. 24 Ibid. 25 Ibid, p 15. Later data, see fn 20 above, showed the number of EU airline insolvencies at 105 from 2000-mid 2012. 26 EU Commission [2013b], p 4. 27 Ibid, p 10. 28 Ibid p 10. The commitment to possibly propose legislative measures if these actions did not succeed was repeated in Para 38 of the Preamble to Directive 2015/2302.