UK Transport Secretary considers airline rules reform

victoria@aviationnews-online.com
By victoria@aviationnews-online.com October 11, 2017 09:57

UK Transport Secretary considers airline rules reform

UK Transport Secretary Chris Grayling has told members of the UK parliament that ministers will to consider reforms which will mean failed airlines such as Monarch can “wind down in an orderly manner”. The announcement follows the collapse of Monarch and a £60m operation to help repatriate some of the 110,000 customers stranded abroad by the collapse of the carrier.

Grayling told the House of Commons that the Government would examine any necessary reforms to ensure passengers “do not find themselves in this position again”.

He added: “We need to look at all the options… whether it’s possible for airlines to be able to wind down in an orderly manner and look after their customers themselves without the need for the Government to step in…”We’ll be putting a lot of effort into this in the months ahead.”

Following the news that transport secretary Chris Grayling is to look to reform the rules governing insolvent airlines, Adrian Hyde, president of insolvency and restructuring trade body R3, welcomed the news. “The air industry is one of a number of parts of the economy where sector-specific rules on insolvency can make orderly wind-downs or business rescue tricky,” he said. “Key licences can often be withheld from insolvent companies, for example… Although the thinking behind some of the rules in various sectors is understandable, the rules can sometimes make rescue all but impossible – leading to avoidable job losses or creditors being left out of pocket – or can significantly alter the way the insolvency is handled.”

Hyde suggests that the government review this issue as part of the stalled 2016 business rescue reforms. “These proposals, welcomed by the insolvency and restructuring profession, have made little progress since last year and the final shape of reforms has yet to be decided by government. This seems like an opportunity to get those changes moving again,” he said.

victoria@aviationnews-online.com
By victoria@aviationnews-online.com October 11, 2017 09:57