Airlines lobby for refunds solution

Ian Taylor

Aviation minister Kelly Tolhurst was due to write to MPs this week to explain why airlines are failing to pay refunds for cancelled flights. Airlines continue to press the

Abta chief Mark

Tanzer issued an open letter to consumers on Tuesday explaining travel firms’ current

inability to pay refunds otect credit notes People understand

the sector is vulnerable and nobody wants to push businesses over

The same source described the

idea of a £4 billion guarantee – understood to be an estimate of the total liability of the industry – as “one for the birds”. A third industry source said:

“How could the system ever cope with that sort of number? It’s a silly number – a highly theoretical worst case. In reality, you’re never going to lose every company.” However, the source said the

Sunday Telegraph report had “added to the pressure, to the number of calls from customers, making it even more difficult to deal with consumer expectations”. Abta chief executive Mark Tanzer wrote an open letter to consumers

on Tuesday explaining: “Many travel companies are unable to provide immediate cash refunds. It’s in nobody’s interests for normally healthy businesses to go under.” Julia Lo Bue-Said, head of the

Advantage Travel Partnership, said agents “are between a rock and a hard place” on refunds, but revealed Advantage members had managed to rebook 60% to 70% of cancelled bookings. Alan Bowen, advisor to the

Association of Atol Companies, said: “We’re not sitting here with pots of money. If you explain to customers, roughly 75% are taking Refund Credit Notes. But there were two million packages booked over Easter so even if it’s only 25% seeking refunds, that is 500,000. “The government is not going to

change the PTRs. We just have to live with it. But it would be very helpful if the CAA could say Refund Credit

Notes are protected.” i Comment, page 14

government to relax the require- ment under EU Regulation 261 on air passenger rights to refund consumers within seven days, but they appear to have diminishing hope of an imminent change. A senior industry source said:

“Logistically, airlines can’t pay the refunds. They can’t deal with the backlog. One major airline is paying 50 refunds a day. The law was not meant for this type of situation.” The source confirmed: “The

aviation minister will set out why passengers are not receiving refunds, explaining airlines lack the ability to comply with the law. But nothing suggests any change is imminent on Regulation 261.” EasyJet chief executive Johan

Lundgren noted last week that easyJet is “one of the few airlines in Europe processing refunds”.

Dale Keller, chief executive

of the Board of Airline Representatives in the UK, called for “a pragmatic solution to a situation where the industry can’t manage the volumes or timelines of the regulation”. He said: “This is a liquidity

issue. I’m hopeful the government will issue some sort of revised timeline. Clarity would be good for the consumer, for the airlines and for the entire travel industry.” Keller noted: “Fifteen EU

member states have issued guidelines [on refund vouchers or credit notes]. The best would be if the UK issued similar guidelines.” Another aviation source said:

“The 15 member states have written to the EC saying ‘allow vouchers’. It’s an absurd situation. The UK is more loyal to European law than founding EU members, the Germans and the Dutch. But EU law is a convenient excuse.” The source insisted “lobbying

by consumer groups” is preventing ministers temporarily modifying the rules.


VIVID Travel owner Kane Pirie this week stepped up his campaign against possible changes to the Package Travel Regulations, warning such a move could risk a judicial review. Pirie reiterated his stance that an MOT-style ‘grace period’ on refunds should suffice

and insisted this should go no further than Abta’s original extension date of July 31. He also rejected suggestions made in an article by Derek Jones, chief executive of

Kuoni parent Der Touristik, that “divisive” campaigns against Abta’s stance were ill-judged and had caused an unnecessary backlash. Guests in a T

ravel Weekly webcast urged the industry to speak with a

single voice on the issue of refunds to present a united front to government. Speaking alongside Advantage Travel Partnership chief executive Julia Lo

Bue-Said, lawyer Jo Kolatsis, director of Themis Advisory, said: “It’s about working together. The more divided voices we have, the harder it is.”

Kane Pirie

23 APRIL 2020 5

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