TravelMole Guest Comment: Barrhead Travel boss criticises ATOL reforms

Barrhead Travel boss Bill Munro hits out at the Government’s new proposed Air Travel Organisers Licencing (ATOL) reforms.

“The main problem is that airlines are not covered by the proposed new rules. So if you buy flights on an airline site and then ‘click through’ to buy your accommodation, you will not be covered by these reforms. The public must not be misled by this confusing legislation.

I’m certainly glad that at least some steps are at last being taken to attempt to stamp out abuse by those who use loopholes in regulations, and the coalition Government trying to address the issue – which is more than its predecessor did.

The trouble is the new proposals are confusing, and they don’t go far enough, quickly enough. The result is holidaymakers are still likely to lose their cash.

Levels of protection depend on the definition of a package holiday, and this is still a grey area – even under the new rules.

I believe that as many as six million Britons will unknowingly go abroad on holiday without adequate financial protection. These six million are all someone’s customers who will believe that they are fully protected from an airline, hotel or any other supplier’s failure – when in fact they are not.

I don’t think it is appropriate to exclude scheduled airlines from the new ATOL reforms, and
I would also urge everyone, consumers and the travel industry, to pressurise the Government to do something before there is a major airline financial failure leaving consumers out of pocket, with no alternative and many stuck and stranded abroad.

There is a misconception that insurances covering airline failure and supplier failure are a substitute for ATOL reform. That is not the case – these insurances do not offer the complete security offered by an ATOL holder. If a supplier fails the consumer may lose part of the holiday and have to rebook, often at a higher price – and some may also have to pay for their flights home.

All ATOL holders, such as Barrhead Travel and travel companies like us, work within the Package Travel Regulations, and if any supplier becomes insolvent then legally the ATOL holder has to provide an acceptable alternative holiday or refund the complete costs. This goes much further than so-called ‘complete financial protection’ insurances claimed by some.

We need the Government to bring clarity to the industry before consumer confidence is lost and we need it to be as broad and as encompassing as possible. We cannot have one rule for a travel agent, one for an ATOL holder, another for an airline.

As long as we have these grey areas, there will be commercial advantages gained by some agents and that leads to confusion and ultimately loss in consumer confidence’.

Consumers still widely and wrongly believe that any holiday they purchase from a seller bearing the ABTA symbol is financially protected in case of natural disaster or a tour operator going bust.

The confusion further extends to other loopholes such as the practice of split invoicing, which internet-only operators use extensively to avoid VAT, as well as compensation payments to stranded passengers.”