Atol holders are still waiting for some airlines to refund money for flights cancelled due to Covid from last March and although refund credit notes have proved “a lifeline”, some customers are now demanding refunds.
That is according to Jess Dennison, director of tour operators Latin Routes and Polar Routes, who told a Travlaw online Big Tent Event: “Refund credit notes [RCNs] did buy us some time [and] definitely helped us through the most challenging time of the pandemic. They were a lifeline.
“[But] I don’t think anyone anticipated holding on to these RCNs so long. We’re still waiting for airline refunds from last March. That is how fundamentally wrong the situation is. Small tour operators are having to pay refunds [to customers] out of their own funds.”
More:CAA extends deadline for issuing Refund Credit Notes
Dennison added: “We hoped RCNs would encourage people to re-book by the [RCN] deadline of March 31, but we’re starting to see quite a few customers with RCNs wanting refunds now.”
She said merchant acquirers, which process card payments, are adding to the pressure on businesses, explaining: “Merchant acquirers don’t recognise Atol as an assurance if we were to cease trading because the CAA refers people back to credit cards [for refunds].
“That is appalling. What is the point of us having an Atol licence? We are penalised for it. It’s infuriating.”
Dennison said the industry had “been overlooked” by the government, but she described the furlough scheme as “very welcome”.
Trailfinders chairman Mike Gooley described Refund Credit Notes (RCNs) as ‘IOUs’ in a blog this week.
He said they “are mounting by the day and the arithmetic is frightening” for travel firms reliant on them.
Gooley wrote: “If a travel company could not find the money to refund almost a year ago, where are the funds coming from to honour these IOU’s when they expire, or when a client demands reimbursement in cash – as they are legally entitled to at any point?
“Many customers have been forcibly issued an RCN and their funds held hostage, unaware of their rights to a cash refund within 14 days and with it, the option to employ another travel organiser for their much delayed holiday.”
He said RCN’s “deprive the traveller the option to shop around” which he called “anti-competitive and anti-consumer”.
Gooley noted the upcoming Business Interruption Loan Scheme repayments due in March, and the conclusion of other support measures like Local Restrictions Support Grants (LRSGs) and furlough and reiterated his calls for travel firms to operate using the trust account model.
“The music in this game of financial chairs is about to stop,” he said.