Passenger compensation in the event of airline bankruptcy (debate) 
President
The next item is the debate on the oral question by Brian Simpson, on behalf of the Committee on Transport and Tourism, to the Commission on passenger compensation in the event of airline bankruptcy-B7-0210/2009).
Brian Simpson
author. - Madam President, I would like to thank Commissioner Tajani for being with us this evening. This question was submitted by me on behalf of Parliament's Committee on Transport and Tourism, as Members had become very concerned over the summer months by the collapse of SkyEurope airline, and approached me to take this initiative on their behalf.
It is worth noting that we have had 77 airline bankruptcies in the European Union since 2000 and, in the sad but likely event that some more may follow in this tough economic climate, we believe it is imperative that we use this question tonight to at least open up the debate now about how we can best protect consumers and air travellers in the European Union.
In the case of SkyEurope, it was an airline based in Slovakia. We saw passengers being left stranded at destinations, without accommodation or even a flight home. We also had the problem that many of those people were told that compensation, or even refunds, would not be possible as they had not purchased their ticket with a credit card or booked through a travel agent. These were passengers who had booked online through their own accounts, a practice that has been increasing over many years.
It is not an isolated case. We saw similar scenes in my home country, the United Kingdom, last year when Excel Airways went bankrupt, leaving over 200 000 people out of pocket, without compensation and stranded at a whole host of airports throughout Europe, with it costing them even more money to find accommodation and flights home.
Many of these people are not regular business flyers or regular flyers like ourselves, and they do not have the financial means to deal with this sort of upheaval. They are normally from those families who spend their savings on a family holiday, only to see their hard-earned money go down the drain through little fault of their own.
The status quo here is clearly not acceptable. Here in the European Union and the European Parliament, we should be proud of our record on passenger rights. We have seen the introduction of denied boarding compensation - although we know there are still issues to resolve with that. We have seen the introduction of rights to assistance and tougher laws on ticket pricing transparency, as well as tough compensation measures in the package travel directive. In fact, I believe we have covered most of the bases when it comes to consumer protection in aviation, but there is clearly a loophole here that needs to be closed.
If you book a charter with a holiday company you are covered by the package travel directive. If you book with a scheduled airline, you are covered by their system, but if you book online your seat only - the airline flight - then you are not covered. It is an anomaly. It is a loophole which Parliament, with the assistance of the Commission, is seeking to close.
In this question we have also floated the idea of establishing a reserve compensation fund, but this must not be seen as a demand on our part or by the Commission. We merely wish to open up the debate as to what mechanisms might be possible to help us best solve this problem, so the idea of the question is to start the dialogue with the Commission in the hope that we can close this loophole and find a solution to what is a serious problem, particularly for those people who find themselves victims of an airline insolvency.
I look forward to working with the Commission to try and find a solution to this problem with my committee, and to hearing the views of the other Members.
Antonio Tajani
Madam President, I am grateful to Mr Simpson and to the entire Committee on Transport and Tourism for bringing such a sensitive issue to the attention of Parliament. This question gives me an opportunity to reiterate formally what has been said in recent weeks following the hardships faced by many European citizens, by many passengers, as a result of the bankruptcy of certain airlines.
As this Parliament knows, the protection of passengers in all transport sectors is a genuine priority for me. I said it during the hearing, when Parliament gave me its vote of confidence, and I wish to repeat it this evening. I believe that we must all take action to come up with a specific legal solution, not least to prevent - as Mr Simpson said - passengers who have purchased an ordinary flight ticket from an airline that subsequently goes bankrupt being treated differently from passengers who have bought their ticket as part of a more comprehensive package holiday.
I therefore believe that the first thing to do is to use the resources that we already have at our disposal. In other words, the public must use all the regulations in the most effective way possible, even if they are incomplete and also lead to disparities. With the same aim of optimising the resources available to us, when the airline SkyEurope went bankrupt, for example, the network of European consumer protection centres was called in to advise consumers about their rights and to collect claims. However, we also need to offer better protection to passengers when an airline goes bankrupt. Passengers with bookings that subsequently lapse must be entitled to reimbursement and, in some cases, to repatriation. This is a complicated problem, which means we need to carefully appraise the measures to be adopted.
The Commission has already started work to come up with a practical response to these issues. At our request, a major study has already been conducted on the consequences of bankruptcy in the air transport sector, particularly those for passengers. This detailed study explains in practical terms the consequences of bankruptcies and their impact on the 700 million or more passengers transported every year throughout the European Union.
The study offers various possible scenarios for defining the best solutions to the various problems raised by bankruptcies, particularly in terms of reimbursement and repatriation, as I just mentioned. As far as both reimbursement and repatriation are concerned, it has been possible to formulate various scenarios, ranging from the setting up of guarantee funds to the development of compulsory insurance schemes for passengers or airlines, and, ultimately, to the idea of introducing targeted changes in national bankruptcy laws.
In February this year, I sent the study to Mr Costa, who chaired the Committee on Transport and Tourism at the time. The Commission is now continuing to analyse the various possible options on the basis of this study and is focusing in particular on the impact on consumers and on the air transport sector. During our analysis, we will take into account all aspects of the debate and will take advantage of contributions from all interested parties. Along the same lines, in the coming weeks, the Commission will set in motion a wide-ranging public consultation process on passenger rights in the air transport sector.
Within this context, and without underestimating the differences and the specific features of package holidays, the Commission will also take into account the impact assessment currently being carried out on the review of Directive 90/314 relating precisely to package holidays. This is because one of the main aims of the public consultation process will be to determine the consequences for passengers of airlines going bankrupt and the possible solutions for remedying this. Obviously, as well as the public consultation, a study will be carried out - as I have already mentioned - to analyse the impact of the various possible solutions.
Obviously, Parliament's contribution will be crucial as far as I am concerned and - in view also of the dedication with which the Committee on Transport and Tourism has worked together to come up with this oral question today - I believe that over the coming weeks, we will be able to cooperate usefully in order to identify together the best solution for meeting passengers' needs and for safeguarding their rights effectively should airlines go bankrupt.
Marian-Jean Marinescu
During the current global economic crisis, with fluctuating fuel prices and a tougher competitive environment, airline operators, particularly low-cost airlines, are going through very difficult times. Increasing ticket prices is not an option in the current situation, while the increase in service charges being applied by some low-cost companies may result in an even sharper drop in the number of passengers.
The financial losses sustained by airlines in 2009 will amount to approximately USD 11 billion, a situation which is set to recover only in the next three years. Against this background, the situation has arisen, which no one wants to see, where airlines are going bankrupt. In the event of bankruptcy due to lack of adequate legislation, there is no practical means of recovering the equivalent value of the tickets or getting passengers left stranded abroad flown home. The support offered by European airlines at a cost, although a modest one, to passengers with a company which has gone bankrupt, as highlighted in the case of SkyEurope, is laudable in itself, but only provides a temporary solution to get through a particular crisis. On the other hand, we cannot always consider the economic crisis itself as an excuse for this predicament, as airlines went bankrupt even before this crisis was unleashed.
Tighter controls on the airline carriers' financial situation, especially in the case of low-cost companies, a tighter control on mergers and takeovers, as well as setting up a sizeable guarantee fund, are a few of the solutions which could, in the long term, offer passengers protection in the event of airline bankruptcy.
Saïd El Khadraoui
Madam President, Commissioner, ladies and gentlemen, our group has been pressing for a debate on the problem of the bankruptcies in the aviation sector, as it is true that we are no longer talking about an isolated case. As my colleague, Mr Simpson, the Chairman of our committee, has already mentioned, there have been 77 bankruptcies - mainly smaller companies, it is true - since 2000, which also means that many thousands of people have seen the money spent on their ticket go up in smoke in one way or another, or have just been left to fend for themselves somewhere. There is reason to fear that other bankruptcies may well follow, in these difficult economic times for the aviation sector. Hence, we must do something.
It is true, of course, that Member States must also play a role in monitoring the creditworthiness and financial fitness of the airlines - this is right and proper - but it is for us to develop a protective mechanism at European level to ensure that the stranded passengers are not left out in the cold. Therefore, we call on the Commission to work faster towards presenting a specific proposal; particularly because, as you pointed out, systems are already in place thanks to all manner of other legislation - including for people booking package travel - in the form of a guarantee fund and so on. Thus, in a way, there is a disparity between those booking a flight via a tour operator and those booking their ticket online; and this, I believe, is another thing we need to resolve.
I hear that you are in the process of consulting the interested parties. You intend to present a proposal over the next year. I think that we really do need to try to step up the pace of our action: instead of waiting until the end of next year, we should perhaps seek a solution somewhat sooner. Therefore, let us talk about a specific legislative proposal without delay, so that we can organise a discussion on the practical details of a kind of bankruptcy insurance.
Finally, I should like to say that I am delighted to hear the Commissioner say we can expect a kind of general statement on passenger rights in the aviation sector. We know that the current legislation is not being applied fully, evenly or satisfactorily across the board, which is something that requires our attention, and I am sure that we shall be coming back to this.
Gesine Meissner
Madam President, thank you, Commissioner, for your response. I am also a member of the Committee on Transport and Tourism and I think it is very important that we have this issue on the agenda now. Indeed, Mr Simpson has already presented it to us.
As it stands, there is a gap in consumer protection where air passengers are concerned. This gap relates to the insolvency of airlines, as has already been discussed. In my opinion, it is extremely important to uphold consumer rights, and that is what we are doing. We are trying to protect consumers as far as possible.
I would like to mention one other aspect from the point of view of our group which has not been a factor in this up to now, but which I think is also an important consideration. Of course, we want consumer rights to be protected, but we also want consumers to have choice. When considering how we can close this gap, it may well be the case that a proposal that you draw up in the Commission will result in over-regulation, which may then hinder innovation when it comes to the options offered in this area.
Consumer law also means, of course, that there should be a choice between various different offers from airlines, for example. Thus, the trend now, for example, is for some very cheap flights to be on offer in place of some flat-rate journeys, something which is also very much welcomed by consumers.
Please do not misunderstand me; I do not want to diminish consumer rights in any way. Protection of these rights, too, is very important to me, and we do need an appropriate instrument to do this. However, we should consider the perspectives that we need to take into account to ensure that there indeed remains a large degree of choice when it comes to air travel and that new options can come onto the market, but that consumers are nevertheless protected and are not left with any sort of financial problems if an airline were to actually go bankrupt or has to file for bankruptcy.
In this regard, I am pleased to hear you say that you are working on a solution. The direction was, of course, clear in that there may also be an aid fund. I am looking forward to the discussion in committee, which may perhaps even take place this year.
Eva Lichtenberger
Madam President, Commissioner, ladies and gentlemen, the financial preconditions for market access for airlines have, of course, already been discussed in the Committee on Transport and Tourism. The issue of guarantee funds was brought up then, but it was clearly not considered sufficiently important or significant by the majority at that time.
Now we are seeing cases which indeed give us cause for consideration and for regulation, because we need regulation in this area. Firstly, we need to continually ensure that the passenger rights that we are adopting here for the protection of consumers are complied with.
The issue of denied boarding and the many cases of this that we have unfortunately seen show that any existing loopholes are utilised immediately. That requires our attention and it requires regulation. We will probably have to resort to the solution of a guarantee fund or some sort of insurance in order to adequately protect passengers from such business practices. We only need to look closely at the last case: even on the final day, there were still announcements stating that everything was alright and many people believed that.
For this sort of solution, however, it must be guaranteed that all parties involved pay their fair share and that it does not result in a few airlines, including low cost airlines, sitting back in comfort and letting others bear the risk. A fair market will not only protect passengers from unfair practices, it will protect the competitors, too.
Ryszard Czarnecki
Madam President, over the last nine years, nearly 80 airlines have gone bankrupt in the European Union. We have heard here today how cut-price airline SkyEurope went bankrupt during the last holidays, leaving thousands of clients out of pocket. The situation is repeating itself. Of course, it is not the owners of private aircraft who suffer, but people who are often less well-off, who save for many months to buy a ticket to fly abroad. I think that, in this situation, the European Parliament, and I speak as a member of the Committee on Transport and Tourism, must insist very strongly that the European Commission adopt principles for the legal protection of passengers and clients, and that also means financial protection. Creation of a special reserve for the compensation of passengers and clients of bankrupt airlines may prevent situations such as those we have seen in the last decade, when many thousands of people, at the very least, have lost their money once and for all. This is specific action which the citizens of Member States of the European Union expect of us.
Jaromír Kohlíček
I would like to thank Brian Simpson for his excellent introduction to this issue. A number of airlines have recently gone bankrupt in rapid succession. The problem has not been restricted to low-cost carriers, although these have accounted for most of the failures. If we fail to discuss the hundreds of passengers stranded in destinations from which it is difficult to get back home, nothing fundamental will happen. Various sectors of the industry have problems from time to time and a solution is generally found in the end. In this case, there are thousands of people involved, often with small children and without the appropriate funds. It is therefore necessary to give a clear signal that we know the solution. It is a matter of capital adequacy and insurance for return journeys. I believe that the Commission and the EU Member States are capable of finding a rapid solution to passengers' problems. The problems of the airline companies will require a different solution, of course. The crisis in the sector requires appropriate instruments and I believe that these will be used.
Juozas Imbrasas
Companies are going bankrupt in the economic recession and airline companies are no exception. In Lithuania, the Lithuanian airline 'FlyLAL' also filed for bankruptcy this year. It is one of tens of European airlines which went into bankruptcy this year. Although legislation adopted by the European Parliament provides sufficient guarantees and compensation for passengers, if, due to the fault of the airline, they are unable to take off on time on the planned route or have problems with luggage, this can only be guaranteed if the airline is not experiencing financial difficulties. Once a company has filed for bankruptcy, passengers who have purchased tickets usually lose all their money. Therefore, as national government institutions observe and licence the activities of airlines and give authorisation for flights, the Commission has recommended that where an airline goes bankrupt, governments could and should immediately return money to the airline's passengers for tickets they have purchased, then later recoup this by subrogation from the bankrupt company. We should also debate the proposal presented by Mr Simpson on a reserve compensation fund. This urgent problem can be debated and the best solution found by complementing the regulation adopted by the European Parliament and the Council on general rules covering the supply of air transport services. Thus, we would contribute to the security of passengers who use airlines' services.
Artur Zasada
(PL) Madam President, Commissioner, the fact that the obligations of airlines to their passengers do not terminate even if the airline goes bankrupt is obvious, and should be taken as a starting point in this much needed discussion which Mr Simpson has initiated.
Therefore, it was with amazement that I listened to the explanations of the SkyEurope spokesman. Ronald Schranz expressed regret at the inconvenience which had arisen for passengers. I stress the word 'inconvenience'. He also stated that clients of the bankrupt enterprise who were waiting at foreign airports would have to look themselves for alternative ways to get home. According to the spokesman, the matter concerned several thousand people, but he was not able to give their precise number. For the SkyEurope representative, this was only a statistic. He forgot, however, that included in that number were many thousands of personal dramas, of passengers who could not get home, to their family or to work. This example shows that it is necessary to regulate this matter as soon as possible. SkyEurope was a listed company, and so we had more information about it. In the case of other cut-price airlines, this is not always so. It may be that the recent Bratislava nightmare will be repeated at another European airport.
At the moment, a heated discussion is in progress, in which different solutions to this important problem are being proposed. There is talk of a special fund created from a surcharge on air tickets, and also of bankruptcy insurance. These are valuable initiatives, but they are not without effect on the price of tickets. At a time of crisis we need a procedure which, on the one hand, will help passengers and, on the other, will not complicate the already difficult financial situation of airlines.
I should like, therefore, to put a question and a proposal to the Commissioner: could a partial solution not be the idea of 'sky solidarity', which would incorporate the principle of joint responsibility of airlines for passengers? Yes, solidarity, an idea which is, to me, as a Pole, especially dear. It should be an answer and a challenge which can be applied immediately. My proposal is based on the idea that passengers of a bankrupt airline who are stranded at an airport would be able to use the aircraft of another airline flying in the same direction, on condition, of course, that there are vacant seats on board. Any costs involved would be settled between the airlines concerned. I would like to ask the Commissioner for a reply.
Olga Sehnalová
(CS) Commissioner, ladies and gentlemen, the collapse of the airline company SkyEurope has focused attention on the general problem of poor consumer protection for airline company passengers. This is no virtual problem - I have had the opportunity to meet a number of customers affected by the collapse of this airline company in person. They were, by coincidence, guests from the French twin town of Chateau d'Ain, who had come for a meeting in Kroměříž in the east of the Czech Republic, which is the town I represent. Their return journey was a very frustrating experience, involving an enforced one-day stopover at Prague airport.
I mention this experience in order to emphasise that SkyEurope was not a normal low-cost airline. It offered its passengers similar services to those of a traditional airline and flew to major airports. Its services were used by a wide range of customers. For customers whose primary concern was not the date of the trip but rather the cost of the ticket, SkyEurope was the preferred choice in the Czech Republic. The SkyEurope company was also one the most important clients for Prague-Ruzyně, the Czech Republic's largest airport. The collapse of SkyEurope, however, affected not only people at airports, but also 280 000 other clients who had bought tickets. According to the information available, air tickets were being sold right up to the moment when bankruptcy was declared.
People who did not purchase tickets with a credit card have practically no chance of recovering their money. Airline companies have no legal obligation to insure against a collapse and so some of them do not take out such insurance. Passengers must therefore make their claims in bankruptcy proceedings. The chances of getting money back in this way are negligible. It is therefore time to do something about this. I would like to thank the Committee on Transport for taking ownership of this issue and the Commission for promising to deal with it. I am confident that a solution will be put forward that will boost customer confidence in the air transport sector, which has been so dramatically affected by the global economic crisis.
Oldřich Vlasák
(CS) Madam President, ladies and gentlemen, the large bankruptcies of airline companies this year force us to consider again whether the unified internal market for air transport is functioning properly. Although several major carriers have gone bust and the situation in the sector continues to deteriorate due to rising fuel costs and slower economic growth, there is definitely no reason for panic, in my opinion. Before we launch ourselves down the slippery slope of regulation, we should remember that the EU has seen a major expansion of low-cost carriers in air transport and fiercer competition between all EU airlines thanks to liberalisation measures.
A formerly highly-regulated industry with costly air tickets has been transformed into a dynamic sector with services which, thanks to the affordable prices in the EU, are being used by ever greater numbers of passengers who, in former times, would not have been able to afford them. Let us therefore consider carefully how we can increase protection for consumers - in this case airline customers - without putting at risk an efficient air transport market. The idea of introducing compulsory insurance against bankruptcy for airlines has already been proposed in the European Parliament in the recent past. It is therefore right to consider how this proposal might be put into effect.
Christine De Veyrac
(FR) Madam President, Vice-President of the Commission, ladies and gentlemen, the oral question we are debating this evening reveals, as many have said, the existence of a real legal vacuum, which leaves passengers with no guarantee should an airline go bankrupt.
Certainly, European legislation protects passengers who have purchased their ticket as part of a package holiday, but it does not protect those who buy their ticket on the Internet. As Mr El Khadraoui said, consumer behaviour has evolved with the development of the Internet, and the legislator must follow this evolution in order to protect our fellow European citizens. A large number of travellers now buy their flight tickets on the Internet. Given that low-cost companies sell their tickets almost exclusively online, it is young people and people on the lowest incomes who are particularly affected by this phenomenon. It is not acceptable that these passengers have no recourse if the airline they bought their ticket from goes bankrupt. All the more so because, in the last few months, the air transport sector has experienced an unprecedented crisis leading to a significant reduction in air travel. We all know that this crisis is worse that that which affected the sector after 11 September and that numerous airlines have gone bankrupt.
It is therefore essential that the European Commission - and I know, Vice-President, that you are aware of this - presents us with genuine solutions, as soon as possible, so that we can protect passengers if the airline they were due to fly with goes bankrupt, regardless of the means by which they booked their ticket.
Magdalena Álvarez
(ES) Madam President, Commissioner, I am pleased with the question that we are debating today, but I think that it only covers one of the possible cases where a company ceases to operate: that of financial collapse or insolvency.
There are, however, other kinds of situation in which airlines may stop operating or suspend their activities. I am referring to cases in which their licence is suspended for safety reasons, voluntary closure or closure for any reason other than a financial one. These situations bring with them identical problems to those that we are discussing today, where passengers are left helpless, since either the cost of their flights is not reimbursed or, if it is, in some cases this reimbursement involves significant costs.
I think that the regulation on compensation for passengers in the event of delay or cancellation could be one of the instruments to be used, but I do not believe it is enough.
In this context, I would like to ask the Commission to look at the possibility of putting forward legislative measures for other cases - the cases that I mentioned - which go beyond airline collapse and which are not covered by the Community legislation in force. Otherwise, we run the risk, despite all our good intentions, of falling short and only providing legal cover for one specific situation, while leaving out many passengers who may also suffer through the closure of an airline, even though the reason for its closure is not economic or financial.
Silvia-Adriana Ţicău
(RO) If we want to have an efficient internal market, we need to have a Community consumer protection policy. Over the years, the European Union has taken relevant actions in this area, and the measures adopted have ensured an increase in the level of consumer protection in areas such as package holiday services and passengers' rights.
However, a large majority of the complaints received from European consumers relate to the violation of airline passengers' rights. Many of these complaints come from passengers whose flights have been cancelled due to the airlines or tour operators going bankrupt. In these cases, consumers become aware of the problems only when the flight is not operated as scheduled.
Although European Union Council Directive 90/314/EEC on package holidays protects passengers if the tour operator goes into liquidation, it does not protect them for airline tickets sold on an individual basis. In addition, in the event of denied boarding, compensation is excluded in the case of extraordinary circumstances, which also includes airline bankruptcy. According to a recent survey, the number of airline bankruptcies in the European Union between 2000 and 2008 rose to 79. 41% of the airlines which went bankrupt between 2005 and 2008 operated regional flights, while 17% were low-cost airlines.
What kind of action could we take, therefore, to provide better protection to passengers in such circumstances? Possible solutions include a passenger insurance scheme to cover these scenarios, a tighter system of supervision, as well as the drafting of legislative provisions guaranteeing compensation to passengers in such situations.
Zita Gurmai
Madam President, passengers' compensation in the case of airline bankruptcies is not only a question of money. It is related to even more serious issues such as safety, accessibility of services and competitiveness. In times of crisis, every economic field is in a precarious situation, and airline transport is no exception to that. It is crucial not to let people's confidence in the operators waver, because this would lead to a considerable decrease in demand and thus would weaken even more the financial situation of airlines. This may influence Europe's whole economic situation and competitiveness.
Passengers' compensation is also in relation to the accessibility of services. I believe that every person in Europe must have the choice to travel by air if he or she so wishes. For this, you must admit that we need safe but low-cost airlines that are affordable for everyone. These airlines should have a stable financial background, because safety does not only mean safety in case of an accident but also implies that, if I purchase an air ticket, I should be confident that by the time of the trip, there will actually be an aeroplane to take me to my destination.
All this gives our oral question its importance, and the fact that there have been almost 80 airline bankruptcies in Europe since 2000 gives it urgency. The need for a clear regulation in this field is evident. Therefore, I would kindly ask the Commissioner to seriously consider this matter and come up with a viable solution as soon as possible.
Joanna Katarzyna Skrzydlewska
(PL) Madam President, Mr Tajani, about a month ago, a budget airline became insolvent, and the airline - SkyEurope - presented a bankruptcy petition. Despite the fact that air industry analysts had been predicting this bankruptcy for a long time, SkyEurope was, nevertheless, still selling tickets for its flights the day before presentation of the bankruptcy petition. As a result, hundreds of the airline's passengers were denied not only the opportunity of making the journeys they had planned but, above all, they were exposed to significant financial losses caused by the airline's collapse. The firm simply informed its clients, in an official statement, that they would have to write off the money they had invested in their tickets.
The example of SkyEurope demonstrates unambiguously that, in our common Europe, we have not yet succeeded in drafting legislation which would protect consumers of air services from the negative consequences of the collapse of an airline. This is a significant problem, which can be seen from the fact that 77 airlines have gone bankrupt around the world since 2000. For example, in 2004, the Polish airline Air Polonia went bankrupt. Therefore, I would like the Commission to present principles for the protection of consumers from the negative consequences of possible airline bankruptcies.
Antonio Tajani
Madam President, Mrs De Veyrac, Mr Vlasák and Mrs Gurmai focused attention on the cause of bankruptcy, in other words, the economic crisis and the difficulties currently faced by the air transport sector, by both low-cost airlines and major airlines.
The European Parliament and the Commission have acted in unison to launch a set of initiatives in response to the crisis. I refer to the freezing of slots, supported by the vast majority of this Parliament, and the Single European Sky initiative, which is a large-scale reform of the air transport system that enables airlines to save on fuel costs because we have reduced the legs between one airport and another.
Precisely in order to provide practical support to all European airlines, be they low-cost or non low-cost airlines, I have called on the 27 transport ministers in the European Union to introduce the Single European Sky reform ahead of schedule, because this is a good way to allow airlines to save fuel and therefore to prevent their balance sheets from being adversely affected. Preventing airlines from going bankrupt would not only protect passengers against loss but would, above all, be extraordinarily important when it comes to protecting jobs. We must not forget that this financial and economic crisis should not be allowed to become a full-blown social crisis.
We know that the air transport sector is beset by problems at international level: we need only think of what happened to Japan Airlines a few weeks ago, when staff cuts were announced. It should be our duty not only to safeguard citizens but also act to ensure that good airlines can remain operational, thus safeguarding jobs.
The European Commission - and please excuse me if I digress - and Parliament have worked to make this possible. I can state that, through our efforts, we have made it possible to create a new completely private airline model: examples include the case of Olympic Airways, the case of Alitalia and the case - which I hope will be resolved - of Austrian Airlines This means that there are no more state-controlled airlines that have to be bailed out by the public when they get into trouble. Instead, whoever makes the mistakes must pay for them.
I would also like to respond to the question raised by Mrs Alvarez, who raised a topic that is certainly interesting: I think I can agree with her proposal adding, in the work we are carrying out, the suggestion that safeguards should also be given to the passengers of airlines that shut down not due to bankruptcy but because they do not comply with safety requirements. In this particular case, the passenger suffers the same loss as a passenger who bought a ticket from an airline that subsequently went bankrupt. The principle must remain that of safeguarding the travelling public when they suffer a loss, in other words, when they cannot board their flight. Moreover, this is the philosophy that underpins - and will continue to underpin - my efforts as long as I remain a Commissioner, so that passengers can be offered the same safeguards in all transport sectors.
For this reason, at the Transport Council due to be held in Luxembourg tomorrow and the day after tomorrow, we will tackle the question of the rights of sea and river transport passengers. This is a choice made by the Commission, with the support of Parliament, which is aimed at safeguarding European citizens. If we really wish to win public confidence and obtain the sort of positive results that were achieved in Ireland, we must legislate to show citizens that the Community institutions are on their side, that they are not simply gravy trains, but places where work is done to safeguard and protect the rights of European citizens.
President
The debate is closed. The vote on any motions for resolutions will take place during the next part-session.
Written statements (Rule 149)
Edit Herczog  
As a result of changing travel habits, an ever-increasing number of people are making their own travel arrangements, without availing themselves of the services of travel agencies. Low-cost airlines have been the winners from this trend over the last decade, in terms of both revenue and market share. Fellow Members, the regular bankruptcy of travel agencies used to be a cause for concern in Hungary as well. We would regularly see on television pictures of families stranded abroad. We must not let the next wave of bankruptcies sweep away the low-cost firms, causing millions of euros of damage to the economy as well as to passengers, not to mention the safety risk, if a company does not have a secure financial basis to support its operation.
This is precisely why we must focus on the following objectives. We must think about tightening the rules on setting up companies. In the case of airlines, further capital and structural guarantees must be required. We must think about tightening up the system for financial and operating accounts and about how frequently spot-checks should be carried out. The size of this sector warrants that regular European surveys should analyse the companies' flight policy, complaint-handling mechanism and the simplicity of the refund procedure. We must make it even easier to deal with cross-border complaints relating to similar matters in the future. If we really want to create a common market in Europe with the consumer's welfare at its heart, we must deal with cross-border complaints and compensation claims more efficiently.
