Abta warns travel businesses employing tens of thousands of people could go bust unless the government gives urgent support to the sector.

It said: “As a result of the ongoing coronavirus outbreak worldwide, the UK travel industry is facing a crisis of unprecedented scale, which is impacting hundreds of travel businesses and many thousands of their customers.

“Without this support, the association believes that perfectly viable and normally successful UK travel businesses employing tens of thousands of people are at risk of going bankrupt.”

It said travel businesses are working “around the clock” helping customers in destinations and those with imminent departures but warned it is becoming “increasingly difficult as the virus spreads”.

Travel agents and tour operators are also facing a huge drop in bookings, said the statement.

The association has today written again to the prime minister and the business secretary, and is calling for immediate, temporary changes to the UK Package Travel Regulations at European and UK government level.

“The existing financial protection structures and regulations were not designed to cope with a large-scale collapse of businesses,” it said.

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The changes Abta is asking for to cope with coronavirus are:

• That tour operators should not be responsible for providing refunds if these costs are not covered by the suppliers (eg the hotel or airline). Where those suppliers cannot or will not refund, there needs to be an emergency government consumer hardship fund to fulfil refund payments.

• That the 14-day window in the regulations for refund payments should be removed.

• That refund credits should be allowed as an acceptable alternative to cash refunds, with all protections carried forward as part of the refund credit.

Abta is also calling for:

• Urgent action to enable the provision to all sizes of business of loans that the Chancellor and Bank of England announced last week with the access mechanisms for these loans made clear.

• A suspension of Air Passenger Duty, the saving of which to be passed onto the consumer to help the sector to recover at the earliest opportunity.

• Immediate deferment of HMRC payments for a period of six months in order to support cash flow.

Mark Tanzer (pictured), Abta chief executive, said: “The evolving coronavirus situation is causing immense damage to UK travel businesses.

“I am calling for urgent action today by the government to make money available to travel and tourism companies and to make temporary changes to existing package travel regulation.

“Without this action, we risk healthy travel businesses going bankrupt, thousands of job losses across the country and customers losing money.”

Meanwhile, two unions, Unite and Balpa, have called on the government to support the aviation sector with financial support and loans.

Which? Travel Rory Boland said: “Millions of people rely on airlines, travel firms and tour operators and with many companies hit hard by the coronavirus crisis, it is vital that the government considers all options to support the industry and help it through this challenging period.

“If taxpayers’ money is to be used to sustain the travel industry, it is even more important that businesses do the right thing by their customers – particularly by supporting more vulnerable consumers – by demonstrating compassion and flexibility during the difficult weeks ahead.”