Aircraft passanger protection in case of insolvency.
07 czerwca 2019

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Existing passenger protection provided under Polish and EU law

 

  1. [Introduction] Aircraft passenger rights, such as care, re-routing and compensation, under Regulation (EC) No. 261/2004 are in force from the sale of a ticket and are unaffected by an aircraft carrier’s financial position. In fact the problem of passenger protection against carrier insolvency seems to remain unsolved under current regulation. Commission Communication on passenger protection in the event of airline insolvency, 2013, stipulates that “neither the air carriers nor the competent authorities have been able to sufficiently ensure in advance that necessary appropriate arrangements are in place to re-route flight only passengers and assist them in the interim to provide ensure that their other rights are respected (e.g. information, assistance, and reimbursement). Passengers' rights under Regulation (EC) No 261/2004 have not been fulfilled by the failing carrier - in particular rerouting stranded passengers and in providing assistance (such as accommodation). This has meant affected passengers have therefore had to be self-reliant.”
  2. [Local level of protection] Member States of the European Communities use different measures to protect the aircraft passangers such as reserve funds, insurance schemes, bank guarantees.
  3. [Scheduled Airline Failure Insurance. Insurance against carrier insolvency] Passengers could be insured against insolvency of the aircraft carrier. “Scheduled Airline Failure Insurance (SAFI) permits flight-only passengers in some States (such as the UK and Ireland) to insure against some of the costs of air carrier insolvency. This commercial scheme is available on an individual basis and is also occasionally included in general travel insurance. SAFI covers the cost of rerouting if a passenger is stranded or a refund of the original ticket cost where a passenger cannot recover it. SAFI does not usually cover the cost of purchasing another ticket on an alternative carrier if a passenger has yet to start their journey, or any additional costs incurred as a result of delay or other non-refundable losses such as car hire. Cover is usually not available to any carrier known to be in financial difficulty and can be withdrawn from the market with little notice.” Commission Communication on passenger protection in the event of airline insolvency, 2013.
  4. [Billing Settlement Plan] “Payment for tickets purchased via IATA-accredited travel agents are held within a central payment mechanism, known as the Billing Settlement Plan (BSP), before being passed to the airline (this is usually monthly, but this period can be shorter). If a member airline becomes insolvent, IATA may voluntarily refund passengers whose payments have not yet been passed to the airline. Such protection is limited - only applying to those passengers who booked within the payment period i.e. at most up to 30 days before the flight. Passengers booking via an IATA travel agent further in advance of travel would not obtain a refund as the money is no longer in the BSP system.” Commission Communication on passenger protection in the event of airline insolvency, 2013. Debates on BSP's qualities and shortcomings can be found on http://ec.europa.eu/transport/themes/passengers/studies/doc/2011_30_03_minutes.pdf
  5. [Refunding from the card provider] It should be mentioned that ticket purchases made by a credit card (debit card) in some circumstances allow consumers to claim a refund from the card provider in the event of the service provider's insolvency. In fact, this refund is usually limited to the cost of the original ticket and in some cases subject to a minimum amount. Commission Communication on passenger protection in the event of airline insolvency, 2013.
  6. [Assistance from other airlines] Ii case of unexpected insolvency of aircraft carrier it is possible to receive some extraordinary assistance from other responsible airlines who possibly will agree to offer to the passengers "rescue fares" at a nominal charge. "Rescue fare" should be charged to cover basic outgoings such as taxes and the marginal costs of carriage (fuel, etc.). Commission Communication on passenger protection in the event of airline insolvency, 2013
  7. [Replacement of air carrier by a travel agency] In case of organized trips, the air transport is organized by a sub-contractor of a travel agency. In such a case airlines do not sell the ticket directly to the traveler. Travel agency - in the event of the insolvency of its contractor should provide for the tourists a flight by another air carrier.
  8. [Insolvency of tour operator as a conseuqence of insolvency of aircraft carrier] According to art. 7 sec. 1 of the Act of 24 November 2017 on tourist events and related tourist services, tour operators and entrepreneurs facilitating the purchase of related tourist services are obliged to provide travelers in the event of their insolvency: (a) the costs of the continuation of the package or the costs of return to the country, including, in particular, transport and accommodation costs, including reasonable expenses incurred by travelers, where the tour operator or an entrepreneur facilitating the purchase of related travel services, contrary to the obligation, does not ensure this continuation or return, b) reimbursement of payments made as payment for a tourist event or each paid entrepreneur's service facilitating the purchase of related tourist services, if for reasons related to the organizer
    tourism or entrepreneur facilitating the acquisition of related travel services or people who act on their behalf, a tourist event or any paid entrepreneur's service facilitating the purchase of related travel services is not or will not be implemented,c) reimbursement of a part of the payment made for the tourist event corresponding to the part of the package or for each service paid to the entrepreneur facilitating the purchase of related travel services corresponding to the part of the service that has not been or will not be realized due to the reasons for the tourism organizer or entrepreneur facilitating the purchase of related tourist services, or people who act on their behalf. According to art. 14 sec. 1 of the Act of 24 November 2017 on tourist events and related tourist services in the event of insolvency of a tourist organizer or entrepreneur facilitating the purchase of related tourist services, the marshal of a province or an entity authorized by him to issue an advance payment order to cover the costs of continuing a tourist event or the cost of returning travelers to the country shall carry out activities related to the organization of return of travelers to country, if the tourism organizer or an entrepreneur facilitating the purchase of related tourism services, contrary to the obligation, does not ensure this return. Finally if the financial security will prove insufficient to cover the costs of continuing the tourist event or the cost of returning travelers to the country, the entity providing these securities immediately informs about the relevant voivodeship marshal and the Insurance Guarantee Fund. The Marshal of the voivodship or the unit indicated by him, applies to the Insurance Guarantee Fund for the payment of funds from the Tourist Guarantee Fund, if the financial security will prove insufficient to cover the costs of continuing the tourist event or the cost of returning travelers to the country, about
  9. [The possibility of pursuing claims from members of the board of airlines by way of a class action or individual suit] Art. 21. 1. The debtor is obliged, not later than within thirty days from the day on which the basis for the declaration of bankruptcy appeared, to file for bankruptcy in the court.
    2. If the debtor is a legal person or other organizational unit without legal personality, the separate law of which grants legal capacity, the obligation referred to in para. 1, rests on anyone who, under the law, partnership agreement or statute, has the right to conduct debtor's affairs and to represent him, alone or jointly with other persons.
    3. Persons referred to in paragraph 1 and 2, are liable for damage caused as a result of failure to submit the application within the time specified in paragraph 1, unless they are not at fault. These persons may be released from liability, in particular if they prove that within the period specified in paragraph 1 the restructuring procedure was opened or the arrangement was approved in the proceeding to approve the arrangement.
    3a. In the case of seeking damages by the creditor of an insolvent debtor, it is presumed that the damage referred to in para. 3, covers the amount of the creditor's unsecured claim against the debtor.
  10. [Indirect forms of passengers protection] There are indirect ways of protection as well. Regulation (EC) No 1008/2008 gives authorities powers in relation to the financial stability of aircraft carriers to ensure that they will be in a position to meet their obligations under the consumer acquis. Article 9 sec. 1 of Regulation (EC) 1008/2008 stipulates that the concession authorities of Member States must suspend or revoke the Operating Licence of a Community air carrier if they are no longer satisfied it can meet its actual and potential obligations for a 12-month period.

 

 

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