The Cabinet minister is proposing to make travellers entitled to payouts for flights within the UK which arrive at their destination more than one hour late.
The UK currently uses the European Union’s EU261 rule, which means passengers on flights shorter than 932 miles can claim £220 for delays of more than three hours, but nothing for shorter hold-ups.
As a result of having new powers due to Brexit, the government is considering replacing this system with a model similar to the one used by rail and ferry operators, which links compensation amounts to the cost of travel.
Under the Department for Transport’s (DfT) plan, which is under consultation, passengers would be entitled to:
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l For a delay of more than one hour but less than two hours – 25% of the ticket price;
l For a delay of more than two hours but less than three hours – 50% of the ticket price;
l For a delay of more than three hours – 100% of the ticket price;
The DfT did not specify which categories delays of exactly two and three hours would fall into.
Airlines avoid paying compensation for disruption caused by events outside their control, such as extreme weather, security alerts and restricted air traffic control operations.
Other proposals to protect passengers’ rights include making it mandatory for airlines operating in the UK to sign up to an alternative dispute resolution (ADR) scheme, which could help more people receive the refunds and compensation they are entitled to.
ADR programmes have helped thousands of passengers escalate complaints without going to court, but membership by carriers is voluntary.
The government is also considering giving the Civil Aviation Authority (CAA) more power to enforce consumer laws through the ability to directly fine airlines for breaches.
Mr Shapps said: “People deserve a service that puts passengers first when things go wrong, so today I’ve launched proposals which aim to bolster airline consumer protections and rights.
“We’re making the most of our Brexit dividend with our new freedoms outside of the EU, and this review will help build a trustworthy, reputable sector.”
Tim Alderslade, chief executive of industry body Airlines UK, said carriers “work hard to ensure that the passenger experience is as smooth and enjoyable as possible”.
His organisation will respond to the consultation.
CAA chief executive Richard Moriarty said the plans are a “clear indication of the need to enhance our enforcement powers, and bring us in line with other regulators”.
He added: “The proposals will improve passenger rights and equip the Civil Aviation Authority with the appropriate tools to act swiftly and effectively for the benefit of consumers.”
Rocio Concha, director of policy and advocacy at consumer group Which?, said trust in travel firms “plummeted” when the coronavirus pandemic began as some airlines “ignored their legal obligations and refused to pay refunds for cancelled flights”.
She went on: “This consultation is a welcome first step that must improve and strengthen consumer rights and protections so that complaints are dealt with fairly and promptly, and that passengers receive the money they are due quickly and without unnecessary hassle.”
Mr Shapps is also proposing to require airlines to pay the full cost of repairing or replacing wheelchairs and mobility scooters lost or damaged during domestic flights.