Flight International online news 14:00 GMT: EasyJet is calling for an airline opt-out option for those carriers offering their own insurance against failure should the UK decide to press ahead with a proposed UK passenger travel levy.

The budget carrier has reiterated its opposition to the levy plans – proposed by the UK CAA to update the existing Air Travel Organisers’ Licensing (ATOL) bond scheme – by launching a new campaign against the proposals.

It comes as Parliament today debates the proposals as part of the UK’s wide-ranging Civil Aviation Bill.

The UK CAA is proposing the ATOL overhaul to reflect the growing number of passengers booking flights direct with airlines, and which are therefore not covered in the event of an airline’s collapse under the existing ATOL scheme.

Under the CAA recommendations tour operators and airline passengers would be covered by a single protection scheme funded by a short-term £1 ($1.76) levy on tickets. It estimates a £250 million reserve fund could be established within three to five years.

UK budget operators EasyJet and Ryanair have already raised their objections to the proposals, describing it as an “unnecessary” tax and arguing the CAA should be more effective at ensuring scheduled airlines are financially secure.

“EasyJet supports the principle that air travelers are protected against the failure of airlines,” the airline says. “However the airline is opposed to a set-rate passenger levy to generate an extortionate and unnecessary amount of money, when there are much more efficient and cost-effective methods of achieving this goal.”

It instead suggests airlines should be encouraged to offer their passengers a form of protection and to provide clear information on what financial protection is offered to passengers. It also suggests establishing a UK/European Union code of conduct for the voluntary repatriation of stranded passengers.

But if the Government goes ahead and introduces the scheme, EasyJet says it want an opt-out for airlines wishing to offer insurance to their passengers against failure. It would also want a banded levy, differentiating between short and long-haul flights, and on the different classes of passengers.

Chief executive Ray Webster says: “EasyJet does not see why the CAA insists on managing the means by which protection is provided, when airlines can provide this far more efficiently through available commercial insurance and using voluntary codes of conduct as seen during the [recent] EUjet failure.”

He also highlights the airline’s preference for a pan-European approach to the issue rather than a national solution which he argues will disadvantage UK carrier against their competitors. “At a time of high fuel prices, the last things airlines need is more red tape from Government,” says Webster.

Source: Flight International