Agents shun risk of DIY packaging

Ben Ireland

Agents are moving away from acting as principal on dynamically- packaged bookings as they look to reduce the risk of having to refund customers for flights that are not cancelled. Principals are liable for delivery of

all aspects of a package or a full refund if cancelled, but the decision by many airlines to continue to fly to countries despite Foreign Office advice means the carriers won’t pay refunds on flights. The Advantage Travel Partnership

has been advising members not to use their own Atols but instead to sell supplier partners’ product or use in- house operator Advantage Holidays. Leisure director Kelly Cookes

said: “A lot of members are Atol- holders and we are seeing less sales through this avenue. There’s a nervousness, and agents have been stung over the last few months.” She predicted the trend would

continue after the Covid-19 crisis, as agents looked to “de-risk”. Lee Ainsworth, head of Advantage

Holidays, said the tour operation still faced the airline refunds dilemma but was contacting customers three to five weeks before departure to “lay out all options” and “avoid panic scenarios”. He said 37% of customers were rebooking for a later date.

Dynamic-packaging agents are liable for flight refunds

Advantage Holidays also allows

cancellations for the loss of deposit, which Ainsworth said covered the airfare in “nine out of 10” cases. Online travel agency Loveholidays

resigned its Abta membership last week over the issue, following rival On the Beach out of the association. Both said they would only refund airfares if airlines refunded them. Alan Bowen, legal advisor to the

Association of Atol Companies, said agents – both online and those on the high street – were faced with the choice of not dynamically packaging or leaving Abta to take the same refund stance as the online giants. “I completely understand why

smaller agencies wouldn’t take the risk,” he said. “If you had 20 bookings with £100 flights, that’s an awful lot of money to lose.” Steve Endacott, a pioneer of

dynamic packaging as founder of On Holiday Group in 2003, said agents would be “mad” to dynamically package in the current market. He said “the risk of dynamically

packaging is tenfold higher” than normal due to mass cancellations caused by Covid restrictions, and warned it was “natural” for customers to seek refunds from the company they’d paid. “If you’re an agent, you should be selling ready-made packages,” he said.

The PM warned this week of ‘significantly greater restrictions’ to come

RCN protection m Ian Taylor

The Civil Aviation Authority and trustees of the Air Travel Trust are considering extending Atol- protection of refund credit notes (RCNs) issued from October 1 amid heightened uncertainty about travel and high cancellation rates. Travel Weekly understands the

September 30 end date for issuing Atol-protected RCNs could be extended next week after Travlaw senior partner Matt Gatenby warned: “The end of September sees the end of the ability to offer Atol- protected RCNs. But they are there for a reason. We still have a winter season to get through.” The government confirmed

The CAA declined to comment,

but a senior industry source said: “In the CAA world, you can’t issue RCNs after the end of the month. “The worry is it suddenly stops.

The CAA is looking at it. They are aware of the urgency. “The world has moved on [since


the deadline was set]. The reality is the early winter market is going to be adversely affected [by quarantine restrictions]. The crisis is not averted. If anything, it’s likely to become more difficult.” The source added: “It

would be odd if Atol-holders

Atol-protection of RCNs in mid-July, following months of delay, when the CAA issued guidance that this “currently will not apply” to RCNs issued after September 30.

4 24 SEPTEMBER 2020

have to make cash refunds for cancellations from October 1 when they haven’t refunded cash for cancellations made six months ago.” A second senior source said:

“There is a discussion of the planned end date for RCNs, but nothing has been decided.” The warning on RCNs came as

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