British airlines try to block rise in passenger compensation

British Airways and Bmi are trying to block plans by the government to increase compensation paid to passengers whose luggage goes missing, even though the maximum payout would still be less than that offered by travel insurance.

Under the plans proposed by the Montreal Convention, the maximum payout would rise from £972 to £1,099 per passenger from next year.

But BA (www.ba.com) and Bmi (www.flybmi.com), which are amongst the worst offenders for lost luggage in Europe, claim they cannot afford the increase in the current economic climate.

BA announced a further half-year loss of £292 million to the end of September, which follows a full year loss of £400 million the previous year.

The two airlines are lobbying the Department for Transport (DfT) to block the increase in passenger compensation, but the DfT says it will back the proposed rise together with the air passenger watchdog, the Air Transport Users Council (www.auc.org.uk).

The increases are only in line with inflation and the maximum payout proposed would still be less than that offers by some travel insurance firms.

Insurewithease travel insurance offers a minimum of £1,500 compensation for the loss of personal possessions, with a £150 excess. Its Gold travel insurance policy provides a total of £3,000 cover, with a £35 excess.

If a passenger believes an airline has lost their luggage, they must report the missing item to the airline or handling agent before leaving the airport to ease the process of claiming compensation from their travel insurance.

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