I thank the noble Lord for his remarks, which have provided a useful introduction to his thinking. Clause 1(3) inserts new subsection (1E) into Section 71 the 1982 Act to clarify that the Secretary of State can make regulations to exempt any form of flight-only arrangement from ATOL. As the noble Lord, Lord Rosser, said, most of the passengers in the Monarch situation were not covered by ATOL arrangements, but it inevitably leads one to reconsider the situation and what needs to be done—we will refer to this later on. The key question is whether it is desirable for flights-only to be covered by some kind of scheme of the ATOL type. That would inevitably mean an addition to the cost of flights. In the case of low-cost airlines, it would be a significant addition to the cost of a short-haul flight. In a situation of what I think the Minister will agree is brutal price competition, I suspect, although I do not know, that the airlines would not welcome any additional costs of this nature.
On Monday, the Minister emphasised the massive scale of the repatriation that the Government, via the CAA, have undertaken, and it has been a very effective way of dealing with the problem. However, Monarch was a small airline. It might have been, as the headlines said, the biggest repatriation since D-Day, but it was a small airline that went bust. When one combines the size and complexity of that situation with the issue of linked travel arrangements and the possible development of such a concept, we have to consider what sort of compensation should be available to people throughout the market. We are in a rapidly changing market and just because airlines seem to be in robust health at the moment, it does not mean, in the uncertain future
we face, that this will necessarily continue in the decades ahead. I would welcome the Minister’s comments on what forms of compensation the Government are considering for those in situations where airlines go into liquidation, and by contrast what compensation should be considered for those who still stick to the old-style package holiday arrangements—if I can call them that.
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