Recommendation 10

HM Government Acknowledged

The government partially accepts this recommendation. We agree that we should consider the recommendations of the Airline Insolvency Review and deliver on those we deem appropriate to ensure that passengers are adequately protected and able to get home if their airline fails. It is important to have a clear framework so that parties’ roles, rights and responsibilities in the event of an airline insolvency are clear. Balancing the interests of consumers, taxpayers and other stakeholders will be critical in considering the Review’s recommendations, to make sure we take forward the most appropriate package of measures. It will also be important that any decisions are based on up-to-date evidence that takes into account significant developments since the Airline Insolvency Review’s Final Report was published in March 2019. We prioritised resourcing critical response work during the pandemic, which meant that a previously envisaged Airline Insolvency Bill was paused. Now that we are looking towards the recovery of the aviation sector, we must ensure that our solutions are fit for today’s aviation landscape. If a Bill is required, we will work to introduce it as soon as practicable. The Airline Insolvency Review also made recommendations in relation to the ATOL scheme. Last year, the Civil Aviation Authority (CAA) published a consultation on ATOL reform, which closed on 16 August 2021. This is the first in a two-stage consultation process exploring ways to encourage ATOL holders to reduce their reliance on using customer’s money from advance bookings to fund working capital. The purpose is to provide better protection of customer money if that company collapses. The CAA published their summary of responses to the consultation in May 2022, and we are working closely with it in developing proposals ahead of a second-stage consultation later this year. This will be complemented by our wider programme to ensure consumers have the protections they need. We are currently exploring options to go further in this area, including through the Aviation Consumer Policy Reform Consultation (which closed on