1. ECTAA – Travel Agents’ and Tour Operators’ Association Air Carrier Insolvency Christina Russe, Manager Industry Affairs Public consultation on air passenger rights – Stakeholder Hearing Brussels, 28 June 2010

2. Who is ECTAA? Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 European Federation of Travel Agents and Tour Operators 80.000 enterprises in EU/EEA 28.000 accredited IATA agents sold 152 million tickets in 2009 170 million package holidays sold through tour operators in 2009

3. Airline failures – what are we talking about? Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 94 European airlines ceased their activity since 2000 Rate of bankruptcies since 2000 increasing compared to the 1990s Global level: 33 suspensions of IATA airlines since 2008 Today 5 European airlines on brink of bankruptcy

4. ECTAA position – better passenger protection Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 Voluntary industry scheme failed in 2001 Mandatory mechanism offering: -refund of tickets -repatriation Compulsory and included in price of ticket Application to third country carriers Member States free to choose form of protection

5. Why a European safety net? Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 Passenger repatriation Currently no protection afforded to passengers Voluntary agreements between airlines to repatriate passengers: -limited to a number of routes -depending on available capacity -extra cost for passenger

6. Why a European safety net? Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 Refund of passengers Credit cards offer some protection but not always Not all purchases done by credit cards Consumer self-insurance only available in some countries and insurance premium varies greatly Customer refunds through bankruptcy proceedings slow and not certain

7. Why a European safety net? Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 Financial oversight not sufficient Air Services Regulation 1008/2008 requires regular assessment of air carriers’ financial situation Yet 13 bankruptcies since its entry into force Suspension of airlines’ operations accelerates the financial collapse

8. Full protection through tour operators Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 Package holiday makers benefit from full protection against airline failures Seat-only tickets no protection Unfair competition between tour operators and airlines for the distribution of holiday products Unfair competition compounded when TO funds are used to repatriate unprotected passengers

9. Cost of passenger protection Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 ECTAA/IATA industry protection scheme: 0,75 USD / ticket on basis of minimum throughput of 120 million tickets per annum Collection system inexpensive Consumer survey: 88% of respondents willing to pay 1€ / flight in exchange for airline failure protection

10. Air Passenger Rights Stakeholder Hearing – Brussels, 28 June 2010 Thank you for your attention! Please visit: www.ectaa.eu