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The fall out of Monarch's failure
Posted on 11/10/2017

EconomyUnited Kingdom

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In the wake of the collapse of Monarch Airlines, which was forced to go into administration on Monday 2nd of October, questions are being raised over how stranded passengers are brought home when an airline company collapses and who is responsible for covering their fares.

The collapse of one of the UK's longest serving airline

The collapse of one of the UK's longest serving airline
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To fund the repatriation of stranded passengers, one proposed idea is an all-round increase in air tickets. For example a levy of 1 on all UK flights would generate 125m pounds per year, meaning this sum could be put aside to fund future airline collapses.

What happens when you're on holiday and the airline company you are due to fly back with has gone bust? This was the nightmare situation experienced by tens of thousands of passengers after the collapse of budget airline Monarch at the beginning of this month. Are you protected as a consumer, covered by your insurance, or are you left scrambling for flights home using money out of your own pocket?

In response to Monarch's fall into administration the Government declared that all 110,000 passengers affected would be brought back to the UK free of charge. The problematic aspect of this proposal is that it now establishes a precedent for the next time a situation like this occurs. Mark Tanzar, chief executive of the Association of British Travel Agent's confirmed "the Monarch collapse has shown consumer protection in travel is not understood and there's a gaping hole at its center." What we can learn from Monarch's failure is that there needs to be a concrete system put in place regarding the relevant procedures when an airline company fails.

With 2000 employees now jobless, 750,000 cancelled bookings and 110,000 passengers left stranded abroad, to say Monarch's collapse has been chaotic would be an understatement. It has been suggested that the company's collapse was due to a lack of certainty and security regarding the future of UK's aviation industry following Brexit. On the other hand, Transport Secretary, Chris Grayling, quoted within The Independent, claims Monarch's business model was to blame as it "was not capable of dealing with a price war in the Mediterranean."

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