Senior industry sources have dismissed reports that the sector is in line for a £4 billion government ‘lifeline’ to fund consumer refunds of cancelled holidays.
One source close to discussions between the government and industry described the report of a £4 billion lifeline as “ludicrous”.
However, a more-limited announcement is anticipated from the government, including guidance on the use of refund credit notes.
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The report in the Sunday Telegraph claimed a £4 billion facility to be announced this week would underwrite travel sector credit notes.
Abta has been lobbying for a change in the Package Travel Regulations (PTRs) to allow firms more time to refund customers, since the PTRs require refunds be paid within 14 days.
Refund credit notes guarantee a refund upon expiry if no replacement holiday is booked and carry the same insolvency protection as the original booking, and Abta has asked the Department for Business (BEIS) to give correctly issued credit notes official backing.
Consumer anger has been growing over delays in processing refunds as companies struggle to repay customers following blanket cancellations and delays in refunds by airlines, hotels and other travel suppliers.
Now agents and tour operators fear a wave of chargebacks on credit cards will trigger widespread failures.
The Sunday Telegraph reported the proposals were being finalised over the weekend by transport secretary Grant Shapps, business secretary Alok Sharma and the CAA.
The source suggested: “People see these stories and get hopeful and then are disappointed when nothing happens.”
But the source added: “It’s hoped that in the coming days there may be more clarity on this issue.
“People understand the industry is vulnerable and nobody wants to push businesses over.”
A second industry source suggested the report was “confused” and said: The danger is of confusion in consumers’ minds that the industry is going to be provided with the funds to refund customers.”
Travel Weekly understands that £4 billion is an estimate of the total liability of the industry for refunds, but that there is no suggestion such funds would be made available by the government.
The source said: “The government has said there won’t be a sector-wide solution for the airlines and that seems to be the approach generally. You can see why. The numbers would be enormous.”
The CAA declined to comment.