New Atol fund will cover linked component internet sales

New Atol fund will cover linked component internet sales

The government plans minimal changes to the Atol scheme to comply with the new European Package Travel Directive, but will establish a second Air Travel Trust fund to cover failures by companies selling the new Linked Travel Arrangements (LTAs).

The Department for Transport (DfT) revealed its approach in a summary of responses to a consultation held last autumn.

However, the DfT also signalled last week that it may reconsider whether to extend consumer financial protection to scheduled airlines.

DfT aviation director Dan Micklethwaite told an Airlines UK seminar in London that the department plans to review “the whole aviation process” and said this would include “what happens when something goes wrong”.

He said: “When airlines fail, people can potentially be stranded [and] we have a state-backed insurance facility that only covers part of the market.”

Previous governments have rejected the trade’s request that scheduled flights be brought into the Atol scheme.

The new PTD will come into force next year, extending the definition of a package to holidays now sold in the UK as Flight-Plus. The LTA category will apply to arrangements where a consumer buys a holiday component on one website and links to another site to purchase a second component. This will carry more-limited protection than a package – although a purchase will be deemed a package if the buyer’s name, email and payment details are transferred.

Reporting on the Atol consultation, the DfT said: “There was broad support to harmonise Atol with the scope and definitions of the PTD 2015. The majority of respondents accepted the need to change the scope of Atol protection.”

There was also “a clear preference for the inclusion of flight-related LTAs within the Atol scheme”. However, “there were differing views on how this should be implemented”.

As a consequence, the DfT said: “We will ensure we have the flexibility to introduce a separate levy and trust arrangements for LTAs.”

Rhys Griffiths, partner and head of travel at law firm FieldFisher, said: “The government is going to make the barest of changes to the Atol scheme – only those absolutely necessary. It is intending to copy and paste the new PTD definition of a package into the Atol regulations.”

He said: “The definition will include practically all scenarios in which a consumer buys multiple travel components at the same time. It will catch traditional packages, Flight-Plus and some click-through sales [where a flight is bought from one site and accommodation from another and the buyer’s data transferred].

“The DfT will also close off the gap whereby travel agents selling flights as ‘agent for the consumer’ technically fall outside the Atol regulations.”

Griffiths added: “The government is going to pass legislation to allow it to create a new Air Travel Trust that will cater just for LTAs.”

The DfT said a consultation on implementing the PTD would be initiated by the Department for Business “shortly”.

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