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Analysis: Trade’s Atol submissions cast doubt on DfT deadline

It is hard to see how the Department for Transport (DfT) can stick by its intention to launch a Flight-Plus licence for retailers and Atol Certificate for consumers by the start of 2012.

The industry displayed universal scepticism towards the timetable in its responses to a DfT consultation that ended last week.

Andy Cooper, head of government and external affairs at Thomas Cook, merely echoed the general view when he said: “January 1 is totally unrealistic. It might be OK if we knew everything, but we don’t. If the entire industry says they can’t do that date, we hope the DfT will accept that.”

The Association of Atol Companies suggested: “April 1 is the earliest realistic start date.”

Abta raised the possibility of a phased introduction last week. The Association of Independent Tour Operators (Aito) suggested similar in its submission. Cooper opposes the idea.

He also insisted Thomas Cook wants flight-only sales removed from Atol protection so long as scheduled airlines are not included.

Cooper told Travel Weekly: “We oppose any sale of a single element that falls outside the Atol scheme. Any sale of multi-holiday elements should fall inside.”

Flight-only sales

Advantage Travel Centres also called for the removal of flight-only sales from Atol until airlines are brought in.

It noted: “The problems [with protection] will not be rectified by these proposals. Airlines have been the cause of much of the call on the Air Travel Trust Fund.”

Advantage chief executive and Abta chairman John McEwan told Travel Weekly: “Our minimum position is that all holidays should be protected and flight-only should come out.”

The submissions reveal a sharp disagreement about the proposal to link holiday arrangements bought separately but on the same or consecutive days.

Aito argued against restricting creation of a Flight-Plus booking to sales made within a day of one another and in favour of extending this to “at least seven days”. The association suggested: “It is a growing trend among consumers to book a flight and subsequently book accommodation a few days later.”

The Travel Trust Association (TTA) also argued for seven days. Yet Thomas Cook argued: “Even a short period between the bookings of two elements will create customer confusion.”

Atol Certificate

Aito saved its most serious criticism for the Atol Certificate. It supports the certificate in principle, but warned of “enormous practical difficulties” and the possibility of “mass non-compliance.”
 
The association raised a series of concerns, not least that “it will be impossible to make the necessary changes to IT systems by the end of December” and “the overall cost to the tour operating industry will be considerable”.

Advantage noted: “Atol-holders would not want a non-Atol-holder to issue a certificate on their behalf.”

There was some agreement that the DfT should act to stop businesses selling holidays as ‘agent for the consumer’. Aito suggested the tax office (HMRC) issue guidelines on the VAT liabilities of acting in this way.

The TTA reported “a large number of travel companies” plan to sidestep the regulations by this means. Thomas Cook agreed, saying: “There will be businesses who seek to drive a coach and horses through . . . [this] loophole.”

Tui Travel made clear it would back “strict enforcement” action against “businesses that seek to avoid the regulations by purporting to act as agent for the consumer”.

The Guild of Travel Management Companies (GTMC) offered a view from outside the leisure sector, expressing alarm at the inclusion in the proposals of corporate travel sales not made on credit. It suggested the impact “would be horrendous”.

The DfT has its work cut out.

Key reform submissions


Abta


Abta logoIn brief:
The January 1 deadline should be pushed back, and proposals should be phased in slowly to give agents time to comply. Reform will be incomplete until airlines are included.

Advantage


Advantage logoIn brief:
The January 1 deadline should be pushed back. Flight-only sales should be removed from the scheme until all airlines are brought in.

Guild of Travel Management Companies


Guild of Travel Management Companies logoIn brief:
Reform will be incomplete until airlines are included. Changes should be put on ice until then. All business travel sales should be exempt.

Scottish Passenger Agents’ Association


Scottish Passenger AgentsIn brief: Airlines should be brought in under a universal consumer levy. Atol reform should be halted until that can be addressed.

Thomas Cook


Thomas Cook logoIn brief:
Confused proposals and an unrealistic deadline. All single-element sales should be excluded. The government has ‘fudged’ reform by failing to bring in airlines.

Tui Travel


Tui TravelIn brief:
The proposals are a ‘significant step’ and deserve the industry’s backing. Tui will support action against companies that seek to avoid the impact of new legislation.

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