Consumer Protection issues in Civil Aviation Industry

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ABSTRACT

Purpose

For this research selected topic is consumer protection issues in civil aviation industry. This research study is conducted to examine the issues of consumer protection in civil aviation industry. The consumer protection has always been a concern in the inherently high-risk aviation industry in Europe.

Background

UK has the fastest growing number of air passengers in the world. The consumer protection laws and regulations are strictly followed in UK, to provide ease to their customers. Consumer protection act of UK has covered many areas in the airline operations; it includes flight left prior to schedule time, denial of boarding, without notice change of flight route, wrong seat allotment, flight cancellation and non operation of flight. The air transport industry is of critical importance to move passengers and cargo from one place to another. In the past few years, air transport has experienced substantial growth. As per the figures cited by the International Air Transport Association (IATA) in the period from January 2006 through January 2007, air passenger traffic grew at an annual rate of 5.7 percent. The maintenance errors have contributed to 15% of commercial jet aircraft accidents. In addition to the flight crew, maintenance has become the second highest contributor to aircraft accidents. Frequently, maintenance mistakes and errors are almost undetectable and uncorrectable until the next inspection, or problems are experienced later during the flight. Liberalization and deregulation of the air transport and the rapid development of low-cost carriers (LCCs) have contributed significantly to this growth. Countries such as the US, and those of the EU, have been trailblazers of the liberalized and deregulated air transport market. The US liberalized its domestic aviation market by removing all operational restrictions on its airlines when it passed the Airline Deregulation Act in 1978. EU countries embraced liberalization by adopting the “Third Package” in 1992 that allowed airlines within the EU greater latitude on operational, price and ownership matters. Studies have indicated that apart from causing expansion in the air transport, liberalization has led to the significant enhancement of consumer choice and lower fares. For example, the deregulation of the US domestic market is estimated to have provided additional welfare gains of around USD 6 billion (period not specified) to passengers through greater choice and lower fares. However, the quoted figure of welfare gain is disputed by authors Paul S. Dempsey and Laurence E. Gesell in their book on “Airline Management: Strategies for the 21 Century” who have stated the following: “About £4 billion of the £ 6 billion was attributed to the value of the enhanced flight frequency for business travellers (calculated at an implausible 1.5 times their hourly wages). But only about 7 percent of passengers fly on an unrestricted coach ticket rand are able to fly at short notice as the business needs change,) and they pay a price for air transportation which is gradually higher than before deregulation, even adjusted for inflation. Ninety three percent of passengers are saddled with advance purchase, Saturday night ...