Confusion reigns about what constitutes a package holiday despite ABTA insisting last month’s Court of Appeal judgment was clear.
Lawyer Peter Stewart, who acted for ABTA in the case, told a briefing hosted by law firm Field Fisher Waterhouse: “The judgement makes pretty clear what a package is.”
But 1st4cruising managing director Kevin Ivie disagreed: “We sell what I thought were packages; now I’m not sure. We don’t have any consensus.”
First Choice Holidays managing director Neil Morris added: “We might have a legal definition, but we don’t have a solution.”
And there was a warning from Civil Aviation Authority consumer protection group director Richard Jackson. “I share your confusion. You are all at risk of losing [a claim for compensation] in a County Court. You will have to be meticulous in how you document what you do.”
Jackson said the judgment has left him with the problem of how to regulate the trade.
The Department of Trade and Industry is preparing draft guidance, expected in January, when the Government should also announce proposals for a £1 levy on ATOL-protected holidays.
It could impose a levy to pay off the debts of the fund that underpins the bonding system, but is expected to use it to replace bonding. Ministers have rejected industry demands for a levy on all flights.
TUI UK managing director Peter Rothwell reiterated his commitment to cutting the amount of bonded product this week, saying: “We will definitely de-package.”
It is believed TUI will cut its bonding for 2008 by half, removing more than two million holidays from ATOL.
Morris said: “If there is a move from bonding, we would have to review our costs.”
Further reading
- Dynamic packaging knowledge base – Travel Weekly