ECTAA – Travel Agents’ and Tour Operators’ Association

Air Carrier InsolvencyChristina Russe, Manager Industry Affairs

Public consultation on air passenger rights – Stakeholder Hearing

Brussels, 28 June 2010

Who is ECTAA?

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

• European Federation of Travel Agents and Tour Operators

• 80.000 enterprises in EU/EEA• 28.000 accredited IATA agents sold 152 million

tickets in 2009• 170 million package holidays sold through tour

operators in 2009

Airline failures – what are we talking about?

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

• 94 European airlines ceased their activity since 2000

• Rate of bankruptcies since 2000 increasing compared to the 1990s

• Global level: 33 suspensions of IATA airlines since 2008

• Today 5 European airlines on brink of bankruptcy

ECTAA position – better passenger protection

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

• Voluntary industry scheme failed in 2001• Mandatory mechanism offering:

- refund of tickets- repatriation

• Compulsory and included in price of ticket• Application to third country carriers• Member States free to choose form of protection

Why a European safety net?

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

Passenger repatriation• Currently no protection afforded to passengers• Voluntary agreements between airlines to

repatriate passengers:- limited to a number of routes- depending on available capacity- extra cost for passenger

Why a European safety net?

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

Refund of passengers• Credit cards offer some protection but not always• Not all purchases done by credit cards• Consumer self-insurance only available in some

countries and insurance premium varies greatly• Customer refunds through bankruptcy

proceedings slow and not certain

Why a European safety net?

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

Financial oversight not sufficient•Air Services Regulation 1008/2008 requires regular assessment of air carriers’ financial situation•Yet 13 bankruptcies since its entry into force•Suspension of airlines’ operations accelerates the financial collapse

Full protection through tour operators

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

• Package holiday makers benefit from full protection against airline failures

• Seat-only tickets no protection• Unfair competition between tour operators and

airlines for the distribution of holiday products• Unfair competition compounded when TO funds

are used to repatriate unprotected passengers

Cost of passenger protection

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

• ECTAA/IATA industry protection scheme: 0,75 USD / ticket on basis of minimum throughput of 120 million tickets per annum

• Collection system inexpensive• Consumer survey: 88% of respondents willing to

pay 1€ / flight in exchange for airline failure protection

Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010

Thank you for your attention!

Please visit:www.ectaa.eu