Government unveils plans to overhaul airline insolvency process

In the light of the failure of the Thomas Cook Group, new legislation is to be introduced by the government to reform the airline insolvency process. It will be designed to protect and repatriate passengers more effectively, as well as enhance regulatory oversight of airlines in financial difficulty.

The proposed bill was introduced at the formal state opening of Parliament on 14 October, for the “effective and efficient management of UK airspace”. Added to this, the government also outlined airline insolvency legislation to “strike a better balance” between improved consumer protection and the interests of taxpayers.

The inability to use the Thomas Cook Airlines fleet for repatriation emerged as a particular issue in the days after the collapse, forcing the Civil Aviation Authority to enlist multiple carriers to source sufficient capacity. Under the proposed legislation the authority would be able to “mitigate the impacts” of a future failure, says the government.

The changes will provide the CAA with the ability to grant a temporary airline operating licence allowing the carrier to continue repatriating passengers after insolvency.

Introduction of a special administration regime, for airlines and tour companies, will keep aircraft flying long enough for passengers to be fully repatriated and supported.


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