BUSINESS NEWS


Transport Select Committee of MPs investigates impact of Covid-19 crisis. Ian Taylor reports Tim


Alderslade: I want to stress the scale of this disaster


Job losses are inevitable in aviation given the scale of the coronavirus crisis and uncertainty about when it will end, industry leaders warned MPs. Airlines UK chief executive


Tim Alderslade told Parliament’s Transport Select Committee: “I want to get across to you the scale of this disaster. It has never been this hard. “Demand has completely


stopped. We don’t know when this [lockdown] will be lifted. We don’t know what the public health stipulations will look like. “We’re going to have a much


smaller, much leaner aviation sector for the next few years. We’ll see


Alderslade


Airlines UK chief says complying with refunds law is ‘impossible’


Airlines are finding it “impossible to comply with the law” on refunds for cancelled flights, MPs were told last week. Tim Alderslade, chief executive


lower frequencies and lower capacity for some time. Airlines have to restructure or go out of business.” Heathrow Airport chief executive


John Holland-Kaye echoed the warning and urged the government to clarify plans to lift restrictions on travel. “More than anything this can


stop companies taking action on redundancies,” he told MPs. “Decisions on tens of thousands


of jobs will be made in the next few weeks.”


of Airlines UK, told Parliament’s Transport Select Committee: “There has been a complete crash in global aviation and everyone is claiming refunds from carriers.” He acknowledged “airlines have


to provide a refund within seven days” according to EU law, and added: “They can offer a credit note and incentives to take that.” But Alderslade said: “It’s


impossible to comply with the law as it stands. I spoke to one airline which in April 2019 paid 51 refunds.


In April 2020 it received 45,000.” He pointed out it took the CAA


seven months to process refund claims following the failure of Thomas Cook and said: “Owing to social distancing restrictions, airlines can’t bring in people to call centres to process these refunds.” He pointed out: “Fifteen EU


member states have written to the EU saying there needs to be more flexibility in the law or guidance to passengers that it is impossible to pay out at the moment.” Abta chief executive Mark Tanzer


told MPs: “One of the things making it very difficult for operators to refund customers is the money hasn’t come back to them from the airlines.”


Tanzer outlines Abta stance to MPs Ian Taylor


Abta chief executive Mark Tanzer appealed for the government to relax the time limit on refunds for cancelled holidays or step in to finance the payments before “a lot of travel companies fail” when he appeared before the Transport Select Committee of MPs last week. Tanzer also called on the CAA


to state publicly that Refund Credit Notes for Atol bookings are financially protected. He told MPs: “Businesses which


have been running for 20-30 years are on the verge of closing down. People are working 18-hour days to try to keep thousands in jobs. If people lose confidence in Refund Credit Notes and there is a drive for cash you will see a lot of travel companies fail.” Tanzer said: “The first thing the government should say is ‘We stand


travelweekly.co.uk


behind these deferred refunds’. “We asked the government to


relax the 14-day window [for paying refunds]. If the government does not want to move the 14-day window – and I understand why it’s difficult – then an alternative is for it to intervene directly so refunds can be paid, so companies can survive and customers get their money.” Tanzer explained: “When the


government advised against all travel in mid-March it triggered a total shutdown and meant refunds have to be paid.” In the first days of the shutdown,


he said: “We saw all sorts of behaviour from companies. Some said ‘We’re not issuing a refund’. Some issued a partial refund. Some issued vouchers. Abta stepped in to give some order. We recognised members have to give a refund but also companies are at risk of failing.


“We issued guidance on Refund


Credit Notes that have an expiry date and are financially protected so customers will still get their money if a company fails. That was to try to give some confidence.” He said: “The majority of these


bookings are covered by Atol. We had many conversations with the CAA and arrived at the conclusion that Refund Credit Notes are protected by Atol. We want the CAA to come out and say that.” Tanzer insisted: “We never said


refunds are not due because they are. The right to a cash refund is still there. If travellers want a refund, they should talk to their travel company about when a refund can be paid.” But he warned: “Our estimate


of the prepayments [owed] is £4.5 billion. These numbers are not small. It will knock over a lot of travel companies [if repaid immediately].”


14 MAY 2020 Mark Tanzer 31


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