A European Commission review of the Package Travel Directive (PTD) has recognised the difficulties caused by airlines failing to refund travel organisers during the Covid-19 pandemic.

A report from the EC to the European Parliament and Council last week noted “the differences between the PTD and passenger rights regulations” and proposes to assess “whether the rules should be more aligned and specific rules for situations like Covid-19 should be proposed”.

The PTD requires customers to be refunded in full within 14 days of a package booking being cancelled.

But many airlines, which are supposed to pay refunds to consumers under EC Regulation 261 on air passenger rights within seven days of a cancellation, have delayed or failed to refund organisers for the flight portion of package bookings during the crisis.

The EC said it would consider how to achieve “a fairer sharing of the burden” among operators.

The UK Package Travel Regulations (PTRs) of 2018 derive wholly from the PTD

The EC report notes the Directive’s rules have “been poorly followed” during the pandemic and suggests a change to require airlines to refund travel organisers where the latter are required to refund customers.

It acknowledges the difficulties for travel businesses, noting: “The PTD does not expressly provide for the possibility to make refunds in the form of a voucher.”

The report refers to the importance of government travel advisories such as Foreign Office advice as “an indicator” in determining whether consumer cancellation rights apply.

The PTD and UK PTRs do not refer explicitly to Foreign Office travel advice, as a reference was struck out of the final draft of the directive. But the report suggests a reference could be included in a revised directive.

The EC also notes the increasing difficulty of securing insolvency protection insurance for package travel organisers and suggests ways to ease the situation, including a potential pan-European guarantee fund.

However, it also considers placing limits on the extent of pre-payments organisers might demand from consumers, a move which would threaten the financial model of many businesses.

The EC will issue a further report in 2022, with any changes to the directive likely to take several years.