Government extends guarantee of Air Travel Trust fund

The government has confirmed it will guarantee pay-outs by the Air Travel Trust fund and the Atol financial protection scheme for package holidays through to September 2022.

The confirmation came in the Global Travel Taskforce report published today, in which the government also pledged to legislate to give the Civil Aviation Authority (CAA) stronger powers to enforce consumers’ rights to refunds from airlines.

The taskforce report includes a section on ‘Consumer clarity and confidence’ which states: “Consumers need to feel reassured that their health will be safeguarded when they travel and that their money is protected.”

It pledges the government will “build consumer confidence and develop trust in booking travel by putting further measures in place to ensure [consumers] their money is safe in case bookings are cancelled.

“This will include reforming the enforcement powers the CAA has on airlines that breach consumer rights, which will be detailed in the strategic framework for the aviation sector to be published later this year.”

The taskforce report also commits the government to “build on the Competition and Markets Authority [CMA] investigations of the practices of travel agents and airlines in issuing refunds to customers affected by travel restrictions during Covid-19”.

The CMA has investigated and issued warnings to several travel firms over delays in paying refunds.

The report confirms: “[The] government will continue to protect consumers’ rights to a refund for Atol-protected bookings if the issuing business fails.

“Government has extended its backing for the whole of the Air Travel Trust Fund until 30 September 2022 so that Atol bookings continue to be fully protected.”

The government initially issued a guarantee of the Air Travel Trust fund in July last year up to September 30 this year.

It undertook to guarantee refund credit notes (RCNs) issued for cancelled package holiday bookings at the same time.

The deadline for issuing RCNs has subsequently been extended several times and is now at the end of this month, with the expiry date set at the end of September 2021.

The CAA has confirmed it is in talks with the government about extending the expiry date for newly-issued refund credit notes.

It appears likely that the date for issuing RCNs will also now be extended beyond the end of April, but the CAA was not able to comment.

The CAA has repeatedly called for an extension of its powers to enforce airline refunds. However, enhanced powers would require legislation and are unlikely to be in place for at least a year.

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