The European Regions Airline Association (ERA) came out in support of the International Air Transport Association’s (IATA) stance on governments thinking about new regulations that would tackle airline bankruptcy.
The IATA’s policies would virtually ensure that passengers are brought back home in the event an airline halts its operations.
Nations have talked about establishing a fund for the purpose of repatriating or refunding money to passengers impacted by these untoward events. The fund would raise costs for European consumers while reducing competitiveness, IATA asserted.
In lieu of a fund, IATA is rallying behind a comprehensive evaluation of current bankruptcy laws.
“The amount of passengers affected compared to the actual total number of passengers carried does not justify the creation of this fund,” ERA Director General, Montserrat Barriga explained.
“We consider that specific and more restrictive measures for airlines would be discriminative compared with other means of transport and would also penalize the financially prudent airlines. Aviation sector plays a critical role in the European economy, creating wealth and jobs, and further regulation such as the creation of a fund risks unintended consequences, including making travel more expensive and distorting competition in the marketplace.”