Jetline Holidays has defended its stance on refunding holidays affected by Covid, saying customers should be “thankful” for how well-regulated the UK’s travel industry is.
The direct-sell operator resigned its membership from Abta last month, saying it no longer needs the bond as it is moving away from selling travel as a retailer.
Jetline has faced criticism from customers over refunds since the pandemic hit business but said suppliers such as airlines had been withholding cash for cancelled flights, meaning it was not able to pass it on to its own customers.
Abta had begun an investigation into Jetline’s refunds policy in response to consumer complaints before the operator resigned its membership on November 25, when the investigation was ended.
Financial director Marilyn Roberts said: “The biggest problem for us, as the middle-man, is making customers understand that we would refund every single person – except our suppliers are holding the purse. Nine months down the line we have gotten a rotten name because we don’t have enough resources to refund everyone [until airlines and other suppliers repay Jetline].”
She pointed out: “We are solvent, because we are owed more than we owe, but it’s difficult for people to understand [the pipeline of monies in the travel industry].”
Roberts added: “However decent and honourable we’ve been over the last 20 years, people have gotten whipped up in a frenzy [over refunds] because there are delays.”
She said the operator had prioritised refunds to some elderly or vulnerable customers, including some who had recently lost loved ones booked to go away on the holiday. “Whatever we do to try and do the right thing, we still get a bad name,” she said.
“Customers need to understand that travel is one of the most regulated industries in the UK – and should be thankful of that. We are protected so that if we did go under all the money owed to our customers would be refunded.”
She said most customers did not understand the financial protection applied to refund credit notes [RCNs] against business failure, adding: “If enough people said they would take RCNs, and wait, we wouldn’t have had the problems we’ve had.”
Online travel agencies On the Beach and Loveholidays resigned their memberships of Abta in September, saying they did not agree with the association’s policy that full refunds must be issued to all customers affected by a change on Foreign Office advice. The OTAs argued that, as package organiser, or principal, they were not receiving refunds from airlines so would only refund other elements of the package to their customers – which goes against Abta guidance.
But Roberts insisted Jetline’s resignation from Abta was related to cost-saving, not refund policies.
She said 5% of business before Covid came from selling holidays as an agent, and that it acted as principal in the package for 95% of sales.
Roberts explained that the operator, which has an Atol licence for 12,000 passengers, will not be making any retail sales until March as part of a streamlining of costs as it battles to survive the impact of Covid on the sector.
It has now moved to a trust account model to protect its package holiday sales, which Roberts said was “good for the consumer”.
She said Jetline had left Abta “on good terms” and that the association “completely understands” its rationale.
Roberts added that Jetline was open to returning to Abta if it began retailing again in the future, but could not currently justify the cost of membership which had been “affordable before Covid” hit. “We have to be careful about what goes out,” she explained. “If we had started five years ago, not 20 years ago, we might not have sold any retail anyway.”
On future business prospects, she added: “We really are praying that the pent-up appetite for people to book a holiday will burst in the new year.
“The effect of the pandemic on the travel industry has been heart-breaking.”