Some companies have “screwed over agents, screwed over customers and put the industry in a very bad light”, according to the chief executive of Jet2holidays.
Steve Heapy also warned firms’ actions during the pandemic could lead to “repercussions in the way travel is regulated in future”.
Asked during a Travel Weekly webcast what new requirements might be brought in post-Covid, Heapy said: “The record of some companies on refunds, that was very well publicised, has certainly drawn the attention of regulators.”
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He added: “I think we’ll be subject to closer scrutiny in the future in respect of that, probably with a regime of penalties, and I don’t think it’s any secret that the government will be very keen on raising as much money as they can and spending as little money as they can in the future.”
Heapy explained: “The government has sort of said previously, that it wants to consider a change to the Atol scheme because the big failures – Monarch, Thomas Cook, which cost the [Air Travel Trust] fund a lot of money, and there’s not a lot left in it.
“They are going to want to build that back up and I would imagine they want it to be self-funding. So again, I would imagine that the last 12 months has made them think – and there has been some talk of perhaps introducing a trust scheme into the UK.”
Heapy said the introduction of obligatory trust schemes wouldn’t be a major problem for Jet2.com and Jet2holidays.
“That’s fine for us because we internally segregate our customers money anyway,” he said. “We don’t borrow off our customers and effectively use them as unsecured lenders. We segregate it.”
Noting a “good chance” the regulation would be brought in, he said: “Part of the reason, possibly, is the way some other companies have treated their customers and partners over the last 12 months.”
But Heapy warned there would be some “innocent” companies that would suffer as a result.
“There will be some perfectly good businesses that behaved very honourably that might be hurt by these legislations,” he said. “And I think that’s a real shame.”
Heapy said new regulations could be “possibly financially onerous” for travel businesses and predicted it would come in “with lots of red tape”.
He believes the government “certainly has an intention to overhaul the [Atol] scheme” and will be “looking at refunds” and “looking at airline insolvency legislation”.
“It’s not good for the industry,” he said, noting: “It’s reputation has suffered.”
Heapy said Jet2 had “refunded our customers, on time and in full, no messing about”, adding: “The customer always has been and always will be king or queen”.
He compared the refunds situation to ordering a TV from an electronics retailer. “If you paid for it up front, were told it’s not come in so I can’t provide you with it, you’d say ‘okay, I’ll have my money back’. And if they said sorry, you can’t have your money back, you’d be in uproar,” he said.
“But for some reason, this seems to happen in travel with some companies and I don’t think that’s right,” he said, “The way some companies have acted has been very irresponsible.”