‘Zombie’ travel companies will fall insolvent anyway, says Kane Pirie

Right To Refund‘s managing director, Kane Pirie, has sent another letter to ABTA, saying its position on Credit Refund Notes will lead to a ‘Pandora’s Box of horrors’.

Pirie, MD of VIVID Travel, says the extra time the ABTA proposal affords travel companies is of no use because if a travel company can’t get itself financially secure within six months, adding an extra year will make no difference.

"The ABTA proposals will in fact make matters worse, as several zombie travel companies will stagger on into Q1 2021, take bookings and then fall insolvent when their loan notes to customers (CRNs) become redeemable. This will drag out this intolerable muddle into 2021," he said.

"When we established Right To Refund some weeks ago, we advocated a six-month grace period and still do so today. I also warned that ABTA’s unorthodox approach of acting as if a wished-for change in law has in fact already happened would cause chaos and open up a Pandora’s Box of horrors. The ABTA proposals, which I have mischievously called the Great Refund Robbery (there is a time value to money), are a turkey that cannot fly.

"The current state of affairs is an embarrassment. It’s anarchy and that damages trust. For retailers, trust is King. Customers have the choice and who would choose to return to a shop that broke its word, held on to your money and generally made it clear they don’t value or respect you?

"We are inviting ABTA to reconsider, for the good of all stakeholders and to move to our position, which in contrast to their current shaky ground, we believe is fair for all stakeholders. This position is detailed in our recent letter to Mr Shapps, Secretary of State for Transport. "

He told TravelMole: "I found out over the weekend a family member who had a honeymoon booked with Virgin Holidays is being given the run around. ABTA’s message to her? No honeymoon for you this year. Richard Branson needs a loan. He only has £4.5 billion.

"In contrast Right To Refund would see that young couple enjoy a great honeymoon this year. Don’t forget, they paid for one! I was angry before. Now it’s personal. A billionaire is trying to cheat my family and ABTA are trying to give him a cloak of respectability to do so.

"ABTA cannot make the Great Refund Robbery respectable. ABTA took the law into their own hands and shattered consumer confidence in themselves and their members.

"If the ABTA badge stands for broken promises why would consumers pay for it?"

On Friday, Pirie said his legal advisors were getting ready to take legal action against the UK Government should it decide to allow travel companies 12 months’ grace to pay customer refunds.

Any legal action will be funded by RTR limited, of which Pirie is the financial backer.

He has been fiercely critical of ABTA over its stance and quit the association last week, just one month after rejoining in March.

The Right to Refund campaign now has nearly 20,000 supporters, including high profile travel industry figures such as former Thomas Cook chief Harriet Green, Martin Lock, CEO at~silversurfers.com, Richard Carrick, non-executive director of Air Charter Service, president of CIMTIG and veteran of the UK travel industry, and industry stalwart Terry Fisher.

The campaign argues that customers who are financially distressed must still be refunded within 14 days, while other refunds need not be processed until September 17.

Like ABTA, Pirie’s campaign initially set July 31 as a deadline date but both have now come up with new dates.

ABTA’s new guidance suggests that those members who have a valid ATOL licence up to next March can issue RCNs with an expiry date of March 31, 2021.

Pirie said: "Our proposal is fair and balanced. Consumers will still be refunded on a timely basis and those in need within 14 days. Travel companies have a generous window in which to arrange their affairs in a professional manner, with money from shareholders and banks, not customers."