Under the agreement, passengers stranded in the event of an airline bankruptcy will be provided access to discounted transport to return home, subject to available capacity.
‘Rescue fares’ of a nominal amount will be available for purchase up to a maximum of two weeks after the event to anyone who does not already possess insurance covering this eventuality.
“This agreement on rescue fares shows that the industry is more determined than ever to ensure reliable and consistently excellent customer service. Airlines have formalized a unique cooperation agreement that puts passenger needs first,” said Tony Tyler, IATA’s Director General and CEO.
The European Commission has estimated that between 2011 and 2020, only 0.07% of all passengers could be affected by airline bankruptcy, and of those, only 12% would require assistance in getting home.
The airline industry has opposed a permanent statutory fund to aid passengers in the event of airline bankruptcy because financially prudent airlines would effectively be subsidizing riskier airlines.
In addition, estimates of the bureaucracy needed to run the fund suggest that up to 85% of the money would be spent on administration.