The Civil Aviation Authority (CAA) has confirmed Refund Credit Notes (RCNs) issued beyond the end of this month will be Atol protected.

The deadline for issuing new RCNs for cancelled Atol bookings was due on Sunday January 31, but the CAA has now extended it to the end of March.

This brings the deadline into line with Abta’s deadline for issuing RCNs for cancelled non-flight packages.

The CAA is also considering an extension of the current deadline of September 30 for the expiry of RCNs and is in discussion with the government on this.

In a statement the CAA said: “The Air Travel Trust has made the decision to extend Atol protection for new refund credit notes issued up to March 31, 2021.

“This means that consumers whose package holiday bookings are cancelled will be able to safely accept a refund credit note where it is suitable for them. Consumers continue to remain entitled to a cash refund should they not wish to accept a refund credit note.”

The CAA noted: “Currently, all valid refund credit notes issued up to the March 31 will benefit from Atol protection until the 30 September 2021, at which point government backing for their Atol protection will cease.

“Consumers should exchange their refund credit note for cash or use it to purchase an Atol protected booking before this date.

“The Air Travel Trust recognises it is possible that some consumers may not be able to redeem their refund credit notes before this date and is engaging with the government to discuss this issue and how it might best be addressed.”

Abta chief executive Mark Tanzer told Travel Weekly: “We’ve been encouraging the CAA to do that [extend the March 31 deadline].”

Speaking on a Travel Weekly webcast, Tanzer said: “Abta Refund Credit Notes can still be issued up to March 31 and we’ve encouraged the CAA to move similarly to that time frame.

“They moved the deadline to the end of January. But the situation has deteriorated since they did that, with the new restrictions, and we made the case that it would help if businesses were able to continue issuing RCNs till the end of March.”

He said: “There aren’t a huge amount of bookings for this time of year, but there are more cancellations. The ability to offer that protected Refund Credit Note is very important.”

Holders of RCNs are legally entitled to seek a cash refund at any point, but must receive a cash refund upon expiry of the note.

Atol protection for RCNs issued for cancellations due to the Covid-19 pandemic was initially applied only to those issued up to September 30. The deadline was extended to December 31 in late October and extended to the end of this month on December 22.

The conditions applied to the issue of RCNs remain unchanged.

CAA consumer director Paul Smith said “We recognise that changes to government restrictions on travel have an unprecedented effect on Atol holders and on consumers with Atol-rotected bookings. In light of these circumstances, we have extended Atol protection for refund credit notes.

“This will allow for travel companies to offer their customers refund credit notes in good faith and mean consumers will not be at financial risk if they choose to accept a refund credit note rather than a cash refund.”