Industry must wait for clarity on definition of a package

| July 24, 2013, 08:21

The industry may have to wait until the autumn for clarification on the meaning of a revised Package Travel Directive published a fortnight ago.

The proposals appear to extend tour operators’ liability to major online travel agents (OTAs), as Travel Weekly reported last week. But not everyone agrees.

Alan Bowen, legal adviser to the Association of Atol Companies, argues the directive is so poorly worded that “dynamic packagers have got away with it”.

The directive proposes two new categories of booking involving combinations of services: ‘customised packages’ and ‘assisted travel arrangements’. The former would be a ‘package’, the latter a kind of Flight-Plus.

Abta chairman Noel Josephides said last week: “It will be awkward for any site that is dynamically packaging to avoid putting a package together.”

Travlaw senior partner Stephen Mason, co-author of the book Holiday Law 2012, agrees, saying: “A sale can be a package irrespective of separate contracts. An assisted travel arrangement is like a Flight-Plus but narrower.”

However, Bowen said: “A customised package is what Kuoni has been doing for years.” He said: “The process is not clear. As I see it, the dynamic packagers have got away with it so long as they correctly describe what it is they have sold.”

He added: “The directive has not been well written. I suspect there is an awful lot of trouble ahead.”

What is a package?

Article 3 (2) of the Package Travel Directive defines a ‘package’ as a combination of services “irrespective of whether separate contracts are concluded with individual providers”.

It qualifies this with a set of criteria that make a sale a package if services are: “purchased from a single point of sale in the same booking process”, “charged at … a total price”, “sold under the term ‘package’”, “combined after the conclusion of a contract … or purchased from separate traders through linked online booking processes where the traveller’s particulars are transferred”.

Bowen argues this implies all the criteria must apply other than where there is an “or”.

However, a memorandum issued with the directive states: “Combinations which meet any of the alternative criteria in Article 3 (2) will be considered as packages, with the associated legal consequences.”

Mason said the directive’s intention seems clear but its wording is open to interpretation. He said: “Other European countries say ‘what is the purpose’ of a regulation. The English courts ask ‘what does the law say?’”

The uncertainty hinges on the definition of a package (see box).

One senior industry figure said: “I agree entirely [with Josephides]. I’m struggling to come up with a picture of what an assisted travel arrangement would look like.” However, he said: “I’m not sure the words would always achieve what is proposed.”

Bowen bemoaned the lack of clarity from the government, whose response to the proposals will be handled by the Department for Business, Innovation and Skills (BIS).

He said: “BIS doesn’t know about package travel. It’s crazy we have them dealing with this.”

Kate Jennings, head of aviation policy implementation at the Department for Transport, will work with BIS on the directive.

Jennings, who drafted the Flight-Plus Atol reform, said: “It’s going to be the autumn before you see the government view. It’s very technical.”