Grant Shapps discusses rescue package with UK airlines | Business

The transport secretary, Grant Shapps, has chaired talks with Britain’s airlines and airports about a potential multibillion-pound rescue plan, as the government insists key routes must stay open to bring stranded tourists home.

The airlines’ plight deteriorated significantly on Tuesday as the foreign secretary, Dominic Raab, announced that the British public were now advised to avoid any non-essential overseas travel for at least 30 days.

But as MPs raised cases of constituents stuck abroad, Raab said repatriation was costly and difficult to organise and the government intended to rely mainly on commercial airlines to return holidaymakers.

He also pointed to the necessity of keeping key freight routes open, to ensure supply-chains were not disrupted.

Thousands of passengers left stranded abroad by cancelled flights are not being told that they are entitled to their rerouting costs, consumer groups have warned.

Normally when an airline starts cancelling, passengers are entitled to EU compensation of €250-€600 (£230-£550). However, where the cancellation is deemed to be an “extraordinary circumstance” – something outside the airline’s control, such as coronavirus – then the rules do not apply.

However, passengers stranded abroad by the cancellation in the EU – or due to travel home on an EU carrier – are entitled to rerouting, or to have their alternative travel costs refunded.

Thousands of air passengers have found themselves on the wrong side of cancellations – particularly in Spain but also in places such as Morocco and Poland. If your flight is cancelled, passengers can ask the airline to be rerouted on to an alternative flight, if that is possible, or to pay for a train or coach replacement.

This applies all flights that start in the UK, EU, Iceland, Norway or Switzerland or flights that arrive in these countries if you are flying on a UK/EU-based airline.

The airline does not have to pay if the passenger chooses instead to receive a refund of the return flight’s cost. If it is possible to get home, passengers are advised to take the rerouting option. Passengers making their own way home should keep all receipts and keep accommodation and other costs “reasonable”.

In practical terms, passengers are having to fend for themselves, as it is all but impossible to get hold of airlines. Passengers trying to call British Airways on Friday described how it was impossible to talk to anyone – and that was before Donald Trump extended the US flight ban to include the UK and Ireland.

The bigger problem may well be getting the airlines to pay up. They have been reluctant to pay rerouting costs in normal times, let alone in the current climate. Ultimately, it remains to be seen whether they will still be in business to pay out, given that many are saying they are unlikely to survive without state help.

As a result, some travellers will likely find themselves relying on travel insurance, where their policy allows for travel disruption.

This is mostly offered by better, more expensive policies. Where the passenger used their credit card to book the flight – directly – with the airline, they may be able to hold their card provider responsible for their extra travel costs – if the flight costs more than £100 – and the airline refuses to pay.

Ultimately, the UK government may have to step in to repatriate large numbers of Britons stuck in places such as the Canary Islands or Morocco, where alternative travel is near impossible.

Passengers on package tours are better protected. Ski customers in France on package trips should be repatriated by the tour operator – and if the firm ceases to exist because it goes bust, the Civil Aviation Authority. The CAA would have to fund emergency repatriation flights, under the terms of the Atol protection. It is a similar story for any cruise passengers stuck abroad.

Rory Boland, the editor of Which? Travel, said: “This is a difficult time for travel operators and airlines but too many people are being given no information at all or poor advice that could risk them being left hundreds of pounds out of pocket. Airlines and operators must ensure they are informing customers of how they will get people home and, where appropriate, how they can claim for additional costs they’ve incurred, such as overnight accommodation.”

Miles Brignall

Shapps spoke to airline and airport executives in two separate conference calls on Wednesday. A senior Whitehall source said it was being made clear to airlines that any assistance would be conditional on ensuring critical routes remain open.

Ryanair announced it would end all but a handful of UK-Ireland flights from 24 March.

The chancellor, Rishi Sunak, said on Tuesday that the government was discussing “a specific potential support package for airlines and airports”, as he announced a coronavirus rescue package for the economy including £330bn in taxpayer-backed loans for business.

Details of what rescue package the government might provide to the aviation sector were being thrashed out on Wednesday, with airlines talking of a “liquidity crisis” and looking for emergency loans.

Industry sources said the government was listening but had not made clear what assistance would be available, and there was some concern that ministers had been unaware of the full extent of the crisis, with up to 90% fewer passengers at many airports, including major hubs.

An Airport Operators Association spokesman said: “We need support in days not weeks.”

Virgin Atlantic had said earlier that up to £7.5bn might be needed to tide UK airlines through the next few months.

Confirmation that airlines would not lose airport slots by not operating flights has allowed many to ground fleets without fear of jeopardising future business.

Airlines still have concerns about their legal liability for any remaining passengers under EU compensation rules.

UK airports have called for emergency loans as a measure of last resort. Additional measures requested include the suspension of all government and local taxes on aviation, deferral of VAT payments and relief from airport policing costs. The industry also may look for short-term relaxation of rules on regular staff retraining, to enable operations to be quickly ramped back up once flights resume.

Charlie Cornish, the chief executive of MAG, which owns Manchester, London Stansted and East Midlands airports, said: “It is key now for colleagues, customers and shareholders that we see specific and tangible support over the next few days.

“With revenues falling significantly over the coming months, airports big and small need to know exactly how the government is going to help them.”

Airlines are not the only transport industry asking for government help, with bus and rail operators expressing concern about a sharp drop-off in passenger numbers.

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