Package holidays: Maximum consumer protection – even in case of insolvency

The insolvencies of Air Berlin, Niki and British airline Monarch at the end of 2017 clearly underline the comprehensive protection that package holiday tourists enjoy if their airline goes bankrupt, because their tour operators organise alternative flights for them. Travellers who book flights themselves, on the other hand, miss out on this protection. Any regulation on airline insolvency insurance should take this into account.

Preventing a double burden

The Federal Ministry of Justice urged the European Commission to extend insolvency insurance cover for air passengers in a letter dated September 2017. If this happens, the following has to be ensured:

  • Prevention of a double burden for tour operators with their own airlines: Insolvency insurance has been mandatory for tour operators since the 1990s. If the tour operator goes bankrupt, the holiday is guaranteed or the customer receives the full price of the holiday reimbursed.
  • Package tourists are already protected against airline insolvency: If a flight is a component of a package holiday, the tour operator organises an alternative flight to or from the destination. Additional airline insolvency insurance for package tourists is therefore not necessary and would mean over-regulation, high costs and a lot of red tape.
  • Insolvency insurance for airlines only makes sense on an international scale: European or national regulations would be ineffective and commercially questionable. German airlines are already extremely disadvantaged over airlines based in other countries as a result of having to pay air transport tax and air security costs.

2017 was a year of airline insolvencies. German package tourists didn’t have to worry because the tour operators took care of every single traveller. 

A lower burden on the state

The high level of consumer protection for package tourists also reduces the burden falling to the state. The tour operators take care of their guests if there’s a crisis, accident, adverse weather or an airline declares insolvency.

TUI takes care of Niki customers

Being a tour operator with six of its own airlines, TUI Group has the resources to respond in exceptional circumstances. When Niki stopped all flights on 14 December 2017, TUI fly scheduled additional flights to ensure that guests didn’t have to forego their holidays. Around 5,000 German TUI guests were affected up to the end of the year. TUI informed them about the changes and paid the additional board and accommodation costs. It also helped stranded holidaymakers who hadn’t booked a TUI package holiday by offering them a replacement flight on a TUI fly plane at half fare. 

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