AVIATION REGULATOR Cathal Guiomard has told Minister for Transport Noel Dempsey that the Travellers’ Protection Fund (TPF) might have to be topped up as its reserves have been depleted in the past two years to meet the compensation costs arising from companies in the travel trade going bust.
The TPF, which provides funds when a tour operator’s bond proves to be insufficient, reduced to €5.7 million at the end of 2009 from €7.5 million in 2007.
Writing in the 2009 annual report of the Commission for Aviation Regulation, released yesterday, Mr Guiomard said the “travel trade licensing and bonding scheme, as currently operated, may require a replenishment of the TPF by means yet to be determined”.
There were 19 company failures in the travel trade sector last year, which led to more than 4,600 claims for refunds.
The TPF, which is managed by the Department of Finance, was built up through a levy on tour operators between 1980 and 1983.
The annual report highlights the steep decline in air travel since the recession started to bite here.
In 2009, the regulator issued 304 travel trade licences, down from 356 a year earlier – a decline of 14.6 per cent.
The number of air traffic movements at Dublin, Cork and Shannon airports declined by 19 per cent on 2008.
Passenger numbers at Dublin airport were back to 2006 levels.
The regulator’s income last year was flat at €4.6 million but its expenses rose by 11.8 per cent to just under €4.1 million.
This was almost entirely due to an 11-fold rise in its consultancy fees to €484,809. This was the result of a long exercise to determine new airport passenger charges for Dublin airport for a five-year period from 2010.
The regulator had a surplus for the year of €581,674 and closed 2009 with reserves of €1.2 million. This included a pension liability of €51,020.
For 2010, the commission has budgeted for a 10 per cent reduction in its costs.
It has also advised the Department of Transport that its roles in ground-handling approvals could be “discontinued or remodelled without loss of consumer protection”.
The regulator is still seeking to recover costs from Ryanair relating to judicial review proceedings initiated in October 2007 by the airline relating to an interim review of the 2005 airport charges, the report states
It estimates the share of traffic at Dublin airport by Ryanair and Aer Lingus at 68.7 per cent.
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