§ Mr. David MarshallTo ask the Secretary of State for Transport, what plans he has to provide protection to scheduled airline passengers who have paid fares in advance in the event of their airline going out of business; and if he will make a statement.
§ Mr. McLoughlinMy right hon. and learned Friend asked the chairman of the Civil Aviation Authority in March 1991 for advice on whether some arrangements could be introduced to help protect scheduled passengers against financial loss and disruption arising from the failure of an airline.
The advice from the CAA was published in August as CAP595. It recommended that if there were to be a protection scheme the most desirable option would be to establish a common fund, financed by a levy charged to all airlines, including foreign ones, which had passengers to, from, or within the United Kingdom. The fund would be designed to compensate such passengers for loss in the event of airline failure. It is likely that primary legislation would be needed to impose a levy.
My Department is now carefully studying the legal and other implications of the CAA's preferred scheme. In addition, my Department is exploring other options considered by the CAA, such as compulsory insurance by airlines.