22 September 2008

AITO calls for XL APD to be repaid

XL Leisure Group holidaymakers who were left out of pocket with the failure of the operator should have their Air Passenger Duty refunded.

The call came from the Association of Independent Tour Operators, which estimated that around Ã&#pound;1 million could be paid back to people who held advance bookings with the failed groupââ¬â¢s airline.

The organisation also joined industry calls for airlines to fall in line with operators and provide financial failure protection to customers.

AITO chairman Derek Moore said: Ã¢â¬ÅâœJust looking at XLââ¬â¢s 200,000 advance bookings for holidays and flights that now donââ¬â¢t exist, we estimate that 80,000 of these could be flight-only bookings. 

ââ¬ÅâœIf you simply take the minimum APD payment of Ã&#pound;10 per person, thatââ¬â¢s a massive Ã&#pound;800,000 that XLââ¬â¢s administrators, Kroll, are sitting on. 

ââ¬ÅâœThe likelihood is that itââ¬â¢s closer to Ã&#pound;1 million in advance tax collected by XL for the Government.  

ââ¬ÅâœItââ¬â¢s a Ã&#pound;1 million windfall for the administrators of a failed company and we donââ¬â¢t believe this is right.ââ¬~

He added: ââ¬ÅâœThe XL collapse has demonstrated clearly the many loopholes that exist in financial protection for consumers ââ¬' and this is another one. 

ââ¬ÅâœTax collected by the airlines should be ring-fenced in some way to ensure it doesnââ¬â¢t simply get absorbed into the financial mess created by a failed company.ââ¬~

Moore said that with bonded tour operators, client money - including tax - is not at risk. 

ââ¬ÅâœFailed bonded tour operators are covered by the Civil Aviation Authorityââ¬â¢s ATOL system, which has rescued the clients of the failed XL companies at a cost of many millions of pounds.  The money comes either from bonds paid up front by tour operators and/or from the new Ã&#pound;1 passenger levy. 

ââ¬ÅâœOther tour operators affected by a collapse ââ¬' and there were many in the XL situation ââ¬' take a personal financial hit, as it is the tour operatorsââ¬â¢ responsibility to ensure that the client gets the holiday as booked.ââ¬~

AITO claims that key anomalies in consumer protection have been created by the internet with many consumers booking direct with airlines, which ââ¬' despite selling holidays and flights in exactly the same way as tour operators ââ¬' are not subject to the same financial protection rules. 

But AITO believes that to expect consumers to understand complex travel industry rules and regulations is unrealistic. 

ââ¬ÅâœThe only sensible way forward is to rationalise the rules and to ensure that airlines are brought within the consumer protection remit of ATOL.  We shall be lobbying Government on this front and on the APD issue.

ââ¬ÅâœIn such a volatile economic climate, the airlines can no longer claim to be impervious to potential collapse.ââ¬~

*See linked Cheapflights/APD story.

by Phil Davies 

• PRINT
• SEND TO A FRIEND
• SHARE

Post your comment

Your Comments

, be the first to post a comment.
Your email:

Your comment title:


Your comment:

Email other comments made to this story

5 characters