Budget Airline Passengers Facing Levy of [Pounds Sterling]6 a Ticket; Ryanair and easyJet Will Have to Contribute to [Pounds Sterling]300million Rescue Fund

Article excerpt


BUDGET airlines could be forced to impose a levy of up to [pounds sterling]6 on every ticket to finance a [pounds sterling] 300million rescue fund for stranded travellers.

The Civil Aviation Authority wants the money to protect passengers if an airline or travel company goes bust.

But, when a one-way flight to Bilbao can cost as little as [pounds sterling]23 including taxes and charges, such a levy would be a significant extra charge.

Low- cost operators, which include easyJet and Ryanair, described the rescue plan as 'totally unnecessary'.

EasyJet, founded by Stelios Haji-Ioannou, said the scheme could cost the airline up to [pounds sterling]120million a year. The CAA wants to protect the increasing number of families - almost one in three - who shun traditional package holidays to put trips together themselves.

They book a flight with a budget operator and then arrange accommodation and car hire, often through the same airline's website.

While package holiday firms are covered by a rescue fund if the travel agent, airline or tour operator goes bust, there is no such protection for those booked via the budget airlines. The CAA warned that a collapse would be disastrous, with customers stranded overseas or left out of pocket, and a kitty of [pounds sterling]200-[pounds sterling]300million would be needed to deal with a major failure.

If that was to be generated in a year, the levy would need to be [pounds sterling]5 or [pounds sterling]6 a ticket. …