Pictured: Simon Bunce
Legal experts outline PTR delay risks and hopes for airline insolvency review. Ian Taylor reports from London
Cohen tips air insolvency review ‘to bring results’
CAA head of Atol Andy Cohen has defended the government’s decision to repatriate all Monarch passengers when the airline failed in October and hailed the promised review of airline insolvency as “a big step”.
Cohen told a Travlaw event in London: “You can look at the repatriation negatively, [but] no government is going to leave 100,000 residents abroad.”
He suggested “many Atolholders” with passengers on Monarch flights “were ecstatic” at the decision to repatriate everyone. Cohen said: “There wasn’t the capacity around that week [when Monarch failed].
“A lot of people wouldn’t have got home. Atol-holders would have had to find accommodation [for stranded customers].”
Asked about the government review of airline insolvency announced by the chancellor in November, Cohen said: “This is a big step. Philip Hammond wants it sorted. They are selecting the chairman now. I expect to see results. I hope this review gives us some new tools on [handling] insolvency.” He told industry representatives: “Hopefully you [will] feed into the review.”
Abta head of legal services Simon Bunce said: “Hats off to the CAA for a good repatriation. But is that their job? They are responsible for the Atol scheme and they ended up transporting back a lot of people not protected by Atol.”
However, Bunce added: “Having 100,000 people stranded overseas would not have been good for the industry. People would have seen going on holiday as risky and we don’t want that. But we need to look at this because it will happen again.”
On the Beach head of legal Kirsteen Bickerstaff said: “From the consumer point of view, the repatriation was great.
“But there is huge confusion around what Atol provides. Why not charge everybody leaving the country [for protection]?”
‘PTR delay leaves trade little time to make changes’
The government delay in issuing new draft Package Travel Regulations (PTRs) risks leaving too little time for businesses to change booking conditions and systems by the July 1 deadline.
A consultation on the draft regulations, which will substantially extend the definition of a package holiday, was supposed to have been published last year.
CAA head of Atol Andy Cohen said last week that the industry should new see the regulations “by the middle of February”, with a consultation of “six to eight weeks”.
Cohen told the Travlaw annual Big Tent Event in London: “You can [also] expect to see both the Department for Transport consultation on the new Atol regulations and the CAA consultation on standard terms in the next month.”
The Department for Business is responsible for the PTRs and the Department for Transport for the Atol scheme, which the CAA oversees.
Abta head of legal affairs Simon Bunce said: “It doesn’t give us very long to get everything in place. That is a problem. EU member states were supposed to have the regulations in place by January 1. What if we don’t come in by July 1?”
Cohen insisted: “We will.”
But Bunce said: “If we don’t, the government will be liable for any losses customers suffer as a result of not having the new protections.”
Bunce argued: “We’ve had this directive since 2015. The problem is it’s not entirely clear what the regulations are going to say. Until we have them, you can’t get booking conditions and systems in place. It’s the same with standard terms.
“If you’re a travel agent, there could be a huge change, but we can’t work out the final detail until we get the regulations.”
The new regulations will extend package liabilities to bookings currently deemed Flight-Plus.
On the Beach head of legal Kirsteen Bickerstaff said: “We assume this will be in law by July 1 and we’ll be selling packages. The issue is, not everyone in the supply chain is where we are. We contract 70% of our own hotels. We have challenges around the remaining 30% of rooms we contract through bed banks. We’re a big company. We’ll be fine. [But] I have serious concerns about other providers.”
Laura Anderton, head of legal at Travel Counsellors, agreed saying: “We’re ready. We do a lot of Flight‑Plus, which will change, but we’re already an organiser.
“We’re just going to be one on a bigger scale. The disappointing thing is the uncertainty.”
Industry accountant Chris Photi of White Hart Associates said:
“What people are after is basic guidance and they aren’t going to get that until April-May.”
‘Don’t panic about GDPR but do act to protect your data’
Travel companies should “not panic” about the General Data Protection Regulation (GDPR) that comes into force in May.
Lawyer Luke Golding of Travlaw said: “The GDPR does not mean you have to delete all personal details you hold. It means you do have to do a bit more and be a bit better at it.”
He suggested three key points for complying with the GDPR: “First, carry out an audit of the personal data you hold. Do you need it all? What do you do with it? How long do you hold it? Second, be ready to inform customers about what you do with data. Third, start looking at how you protect that data. If something is going to go wrong, it will be through the loss of data.”
Abta head of legal services Simon Bunce agreed: “Don’t panic.” But he said: “Do worry. Do the audit. Check your security. See it as an entire organisation thing.”
‘Many companies in denial about need to make changes’
The delay in guidance on the new package regulations is fuelling “a denial” of the need to make changes among some companies.
Kirsteen Bickerstaff, On the Beach head of legal, told the Travlaw event: “The fact there has been this delay [means] a lot of people are in denial, thinking ‘We’re leaving the EU, why are we implementing this?’.”
Bickerstaff forecast: “There will be failures. The insurance costs [for package protection] are astronomical. The gastric illness issue is still not sorted.
There is the issue of credit card fees and the PTD [on top].
A lot of people who will suddenly be travel organisers are not set up to deal with it. You’re going to have huge insurance excesses [on claims] before insurers step up.”
Lawyer Luke Golding of Travlaw agreed. He said: “There are a lot of companies in the denial stage. While the government did say the approach would largely be to cut and paste [the Package Travel Directive into the UK regulations], that is not enough certainty.”
Abta head of legal affairs Simon Bunce said: “A lot of people are in the fatigue stage. They have heard about this for years. They want to know when it is out.”