Abta Travel Law seminar: Liability, tax and the Package Travel Regulations Continued from page 70

detail in their agreements [with suppliers].” He insisted: “People don’t

know the extent [of this]. Te airlines don’t know. It’s possible airlines are creating LTAs without knowing. Tey need to be disci- plined in what they are doing.” Jo Kolatsis, director at

business consultancy Temis Advisory, agreed, saying: “Airlines are selling LTAs via targeted click-throughs. No one is being upfront about numbers. [Airlines] are struggling a bit with it. Iata is looking at solutions. “We will at some point have

a test case. Someone will say ‘I thought I bought a package’.” Claire Mulligan, partner at

law firm Kennedys, pointed out: “Te duty of care is very different [on an LTA], but you have to make crystal clear you are selling an LTA and not a package, otherwise it will be a package.” Kolatsis added: “We’re all

struggling with LTAs. Tey add a layer of complexity we did not need.” However, Rhys Griffiths,

partner and head of the travel group at law firm Fox Williams, told Travel Weekly: “It’s not that complicated [for an airline to record its LTA bookings].” He cited the example of an

airline partnering to provide accommodation and said: “Tey know how many bookings they do with [because they earn commission on click-through sales]. Tey work out the bonding, which most airlines already have, on that basis and submit monthly or quarterly returns. “Te wording of the

mandatory information is conditional and the consumer sees it before they book.”

CAA and lawyers at odds over ‘package-plus’ rules

Te CAA and leading industry lawyers disagree on a key interpretation of the Package Travel Regulations (PTRs) which came into force last year. Te regulations leave unclear

whether a retail agent who sells a tour operator’s package and an additional service to go with it, such as an airport hotel, has created a second package or ‘package plus’. Rhys Griffiths, partner and head

of the travel group at law firm Fox Williams, argues an agent selling an additional travel service with a package booking has not created a ‘package-plus’, insisting: “It’s not a separate package, but a package and a sale of an additional travel service.” Griffiths told the Abta Travel

Law seminar: “Te regulation gives a package its own legal identity. It is defined as a combination of two or more travel services. A package is not listed as a travel service.” He said: “Te lawmakers could have listed a package as a travel service if they wanted and they did not.” However, David Bourne, CAA

consumer and markets group head of Rhys Williams If evidence emerges

that consumers are being disadvantaged in this way, we will act

has been defeated [if Rhys is right].” Bourne said: “At the moment,

we’re not aware of problems. No harm is being done by agents adding a small travel service to a package. But if evidence emerges that consumers are being disadvantaged in this way – that packages are being disaggregated – we will act.” Griffiths said: “It’s a grey area

regulation and governance, said: “We received legal advice that supports an alternative interpretation.” Bourne conceded: “Tis is an area

that does not lead to an easy answer. Tere are practical issues if the entire package responsibility is transferred to the agent who has added a service. But if an agent added a flight to a package [and] if the travel service was crucial to consumer enjoyment of the package, then the purpose of the regulation

[and] will probably be tested in court.” Fellow industry lawyer Joanna

Kolatsis, director of Temis Advisory, agreed: “Tere is no real clarity, but we don’t agree that if an agent books a package and sells another service it has to be a package-plus.” Abta takes a similar view. Legal

affairs director Simon Bunce said: “Abta does not consider it a new package. We treat that [additional sale] as straight retail turnover.”

‘Agents must trade in way to satisfy Trading Standards’

Agents risk falling foul of the 2018 Package Travel Regulations (PTRs) if they have not considered how they are trading and should act promptly if contacted by Trading Standards, which enforces the rules.

70 6 JUNE 2019

Temis Advisory director

Joanna Kolatsis said: “Operators took the new PTRs in their stride, but it was a big change for those not caught by the 1992 regulations.” Most agents “are choosing not

to act as an ‘organiser’ [taking on the liabilities of a tour operator] because it is easier”, Kolatsis told the Abta Travel Law seminar. But she said: “Tere is the

capacity to have a lot of accidental ‘organisers’. People are trading in

a non-compliant fashion because they are trading as they did before.” She reported a client in Crawley

was questioned recently by Trading Standards and threatened with an immediate shutdown of their website if they did not make changes. Kolatsis said: “It was not a bad

case of non-compliance, but of bad draſting. I was amazed at how heavy- handed it was. I encourage anyone in whom Trading Standards shows any interest to treat it very seriously.”

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