Abta has warned ministers that flaws in the Flight-Plus Atol proposals will encourage travel companies to find loopholes.
The association insists it supports the extension of consumer protection. However, in its response to the Atol Reform Consultation, it tells the Department for Transport (DfT): “This should act as a stark warning… imposing an unrealistic timetable will produce a lack of compliance from companies who otherwise support the scheme.”
Abta says the fact airlines are not included remains “the primary issue” and while this remains the case, “the proposals… will incentivise traders to seek to avoid the scheme as far as legally possible”.
It describes the proposals as a “first step… which we support on the understanding airline holiday sales and then all flights will be subsequently brought within scope.”
That would change if lawyer Peter Stewart is right that the failure to exempt carriers from the Draft Regulations will require them to provide consumer protection regardless of having an Atol.
Abta identifies five obstacles to a timetable it says is “over-ambitious and potentially endangers the quality of the reforms”:
- The length of the consultation process
- The requirement for agency agreements
- The need for businesses to make system changes
- The lack of clarity on liabilities – leading to questions on bonding and insurance
- Unresolved issues regarding the planned Atol Certificate
The Civil Aviation Authority’s revised Standard Terms will only be available in October when “many aspects of the new obligations will become apparent”. Other issues will only be clarified by the Air Travel Trustees in November, leaving “an extremely short window for implementation”.
Abta adds a further concern about the availability of scheduled airline failure insurance, saying: “We fear there is an insufficient depth of capacity to provide coverage.”
It concludes that the DfT should reassess its January 1 target, adding: “Only 22% of Abta members think this timetable is achievable, 62% think it unachievable.
“These reforms must not be implemented so swiftly that they create more problems.”
Abta also raises concerns about the consultation itself when “fundamental issues” remain unresolved and “important questions unanswered”.
These include the level of protection to be provided by the Air Travel Trust Fund and the role and responsibilities of Approved Bodies – which will provide collective Atol cover – which in turn will determine bonding requirements and costs.
It says: “Businesses are being asked to answer questions where the proposals are impossible to assess.”
Abta reveals that in talks with the DfT in late August: “We were made aware of concepts and proposals not included within the scope of this consultation. These supplementary aspects are fundamental to the workability of the scheme.”
Without a chance to respond, Abta warns: “It is likely the proposals would carry only the qualified support of the trade… A chance for a formal reply is required if the consultation is to be fair.”
Other aspects of the reform also come in for criticism. Abta argues: “The consultation should have been explicit about the proposals to extend the concept of Flight-Plus to cover a package plus car hire” – where an agent sells car rental with a package holiday.
This is “an everyday transaction”, yet the requirement for a Flight-Plus Atol to cover it “would potentially bring more agents within the scope of the proposal than any other measure”.
Abta points out business travel should be exempt from the scheme, yet the current proposals appear to include corporate travel where arrangements are paid in advance.
It concludes the reforms “are likely to entail significant systems and process changes” for the 629 members it estimates will require a licence for the first time, and 631 who already have one.
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