The Civil Aviation Authority and trustees of the Air Travel Trust are considering extending Atol-protection of refund credit notes (RCNs) issued from October 1 amid heightened uncertainty about travel and high cancellation rates.
Travel Weekly understands the September 30 end date for issuing Atol-protected RCNs could be extended next week after Travlaw senior partner Matt Gatenby warned: “The end of September sees the end of the ability to offer Atol-protected RCNs. But they are there for a reason. We still have a winter season to get through.”
The government confirmed Atol-protection of RCNs in mid-July, following months of delay, when the CAA issued guidance that this “currently will not apply” to RCNs issued after September 30.
The CAA declined to comment, but a senior industry source said: “In the CAA world, you can’t issue RCNs after the end of the month.
“The worry is it suddenly stops. The CAA is looking at it. They are aware of the urgency.
“The world has moved on [since the deadline was set]. The reality is the early winter market is going to be adversely affected [by quarantine restrictions]. The crisis is not averted. If anything, it’s likely to become more difficult.”
The source added: “It would be odd if Atol-holders have to make cash refunds for cancellations from October 1 when they haven’t refunded cash for cancellations made six months ago.”
A second senior source said: “There is a discussion of the planned end date for RCNs, but nothing has been decided.”
The warning on RCNs came as the government set out a raft of new restrictions, including a requirement for all shop staff to wear face masks.Prime minister Boris Johnson declared Britain had reached “a perilous turning point” and warned of “significantly greater restrictions” to come.
Travel Weekly understands the September Atol-renewal process will be completed on time next week. But industry sources dismissed a Sunday Telegraph report that “the travel industry is line for its biggest shake-up in half a century” as “watchdogs prepare sweeping changes to reflect public anger over delayed refunds”.
The Telegraph suggested: “Travel operators will be forced to ring-fence customer deposits” with “changes implemented over the next few weeks.”
But a senior source insisted: “The government knows nothing about this. The CAA knows nothing about it. All sorts of things need to be looked at post-crisis, but nobody thinks it would be sensible to do it now. It would remove what little liquidity there is in the system and make things worse.”
A second industry source suggested the CAA might “hint” that it is considering reform this week, but said: “This is in the baby-steps stage. Nothing will happen until next year at the earliest and then it would involve a consultation.”
Tui reported “volatile changes in travel advice” had led to “higher customer refund obligations during late August and September” which had reduced the funds it has available from €2.4 billion on August 12 to €2 billion at the start of this week.