Foreign Office’s ‘indefinite’ advice against travel expected to trigger millions more refunds

The Foreign Office decision to extend advice against overseas travel “for an indefinite period” ratcheted up the pressure on agents and operators, opening the way to millions more refund demands.

The change on April 4 came as the government continued to dither over suspending the Package Travel Regulations’ (PTRs) requirement to refund consumers within 14 days.

The Department for Business (BEIS), which oversees the PTRs, has been pondering for weeks whether to allow businesses to defer refunds by issuing refund credit notes in the place of cash, as Abta has demanded.

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The failure to act flies in the face of European Commission advice to governments to alleviate the pressure on tour organisers and travel agents by allowing the issue of credit notes or vouchers in place of cash refunds.

In a letter to member states, Europe’s justice commissioner made clear the EC would support the issue of vouchers so long as consumers’ right to a refund under package travel rules are upheld and insolvency protection remains in place.

“It ought to be enough.”

An industry source described the justice commissioner’s guidance as “incredibly helpful”, saying: “It ought to be enough.”

By contrast, the source said: “The Foreign Office advice has added enormously to the pressure. Operationally it won’t make a lot of difference. What it makes a difference to is consumer confidence and consumer pressure [for refunds].”

However, the source added: “No one is saying flights won’t restart.

“The government has said it’s looking at how to relax restrictions.

“Abta is encouraging people to manage this on the basis of a rolling date.

“People are converting a lot of consumers to future bookings by incentivising these. It’s the sensible thing to do, particularly if you only carry a deposit forward. For others, it’s about issuing refund credit notes.”

Abta continues to press for a decision from BEIS amid growing alarm at companies’ prospects for survival.

UK airlines also await government guidance on refunds despite a growing number of EU states taking action. Germany became the latest to sanction the issue of vouchers in place of refunds for cancelled flights in all but “cases of hardship”, setting aside the requirements of EU Regulation 261 on air passenger rights. The German vouchers are valid until the end of December 2021.

The Dutch government has also set aside refund rules until June 30, instructing regulators not to enforce Regulation 261 on condition “vouchers are valid for a maximum of 12 months”.

Government guidance needed

Dale Keller, chief executive of the Board of Airline Representatives in the UK, said: “We need to find a way through. A number of EU states have offered guidelines. It would be logical for the UK to provide guidance. That is what the industry needs.”

A senior aviation source added: “Refunds are a huge issue, but there is tension in government between the interests of consumers and those of airlines and travel agencies.”

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