Published on Friday, February 4, 2011
David Grant, Vantage Insurance’s Professor of Travel Law at Leeds Metropolitan University, comments on this week's ATOL reform announcement:
"Theresa Villiers statement today on ATOL reform tells us little new. The extension of the ATOL scheme to ‘flight plus’ was flagged up over a year ago as was the possibility of bringing ‘click throughs’ into the system
The travel industry has had a long time to chew over these proposals and what they need now are more details not more statements of principle.
What will make up the ‘plus’ in ‘flight plus’? Accommodation certainly, car hire probably. But what about attraction tickets or theatre tickets or car parking? And what if the accommodation consists of a night in an airport hotel before departure – will that count? And within what timescale must the ‘plus’ element be purchased to qualify – 7 days, 14 days, a month or right up to the time of departure? There are few answers to these questions in the statement.
What the statement avoids saying is that the government has again failed to grasp the nettle of airline insolvency. If an airline supplying the ‘flight’ part of ‘flight plus’ goes bust then it is the travel agent who will have to pick up the tab – turning a travel agent into a quasi tour operator with all the financial burdens that that entails. Airlines go bust in Europe all the time – why should there not be a scheme which deals directly with problem rather than shuffling it off onto travel agents?
The proposals on ‘flight plus’ however are good news for consumers because they do result in a much needed extension of protection in cases of airline insolvency - although whether it will remove the uncertainty over whether a holiday is protected or not is dubious. It has certainly moved the goalpost in favour of consumer protection but large gaps still exist - in particular ‘flight only’ when bought direct from an airline or on its own from a travel agent. This is regrettable given that one of the main drivers of the reform was to eradicate this kind of uncertainty.
As for ‘click throughs’, there seems to be no mention of this in the Minister’s statement – which is not surprising given that the original proposals were not put forward with any great enthusiasm and were hedged around with caveats. Reading between the lines it looks as though nothing will be done about ‘click throughs’. Given that that this was one way of catching airlines in the net it looks like another weakening of Government resolve."
* David Grant is Vantage Professor of Travel Law at Leeds Metropolitan University and Emeritus Professor at Northumbria University. He is author of Holiday Law and editor of the Travel Law Quarterly.
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.