0800 644 6080
Call FREE from Landline and Mobile
Est. 1989

Government Recommends ‘Insolvency Levy’ on Passenger Flights

Written by: Keith Tully

Published: 7th May 2019

Government Recommends ‘Insolvency Levy’ on Passenger FlightsA government review has recommended that a levy of 50 pence per journey be introduced on passenger flights to cover costs if an airline becomes insolvent.

The idea has been put forward in a newly published document that reflects the conclusions of relevant experts who were asked by government to conduct an ‘Airline Insolvency Review’.

Chris Grayling, transport secretary, commissioned the review following the collapse into administration of Monarch Airlines in October 2017, which saw as many as 85,000 people having to be urgently repatriated to the UK by the Civil Aviation Authority (CAA).

Around 98 per cent of people who had flights booked with Monarch prior to its collapse were able to return to the UK on the same day as they were initially scheduled to as a result of the CAA’s actions.

But that all came at a significant cost to the taxpayer and the government is recommending that those costs in future be covered by a levy on passenger flights.

Overall, insolvencies within the airline industry are estimated to have cost UK taxpayers in the region of £40.5 million in recent years.

“Although airline insolvencies are relatively rare, as we have seen in recent months they do happen – and at times have required government to step in to repatriate passengers at great cost to the taxpayer,” said Peter Bucks, who was asked to chair the Airline Insolvency Review.

“We are therefore proposing a comprehensive scheme to protect all UK-originating air passengers, with the associated costs met largely, if not wholly, by the private sector,” he wrote in his foreword to the review.

Mr Bucks makes clear that the creation of any such scheme would add notably to the costs incurred by airlines but that those costs could be covered by adding around 50 pence to the prices paid by customers for individual flights.

“I welcome the report and I am grateful for the work performed by Peter and his team,” said Chris Grayling in a statement responding to the review.

“We will now consider the range of options put forward by the review, and work to swiftly introduce the reforms needed to secure the right balance between strong consumer protection and the interests of taxpayers,” he added.

Keith Tully

Keith Tully

Join Keith Tully on Linked In Follow Keith Tully on Twitter

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

Meet our Team of Experts
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Dealing with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
Number of UK Offices
Directors Helped
Licensed Insolvency Practitioners