Plan for LTAs ‘creates a loophole’ in protection

Plan for LTAs ‘creates a loophole’ in protection

Proposals for Linked travel Arrangements, a new category of protected holiday, are causing Concern. By Ian Taylor

Few people appear to be selling holidays defined as Linked Travel Arrangements (LTAs) under new Package Travel Regulations to come into force in 2018, but there are fears these could make “a shambles” of the Atol regime.

The government has pledged to revise the regulations in line with the EU Package Travel Directive, which extends the definition of a package to bookings deemed Flight-Plus in the UK and creates the LTA category for ‘click-through’ sales between websites with less protection for consumers.

However, the definition of an LTA, involving the separate selection and payment of travel services and separate contracts with providers, could also apply to some bookings by phone or in shops.

Abta head of legal services Simon Bunce told a Hill Dickinson travel law seminar in London last week that the LTA “creates a loophole” in protection. Andy Cooper, head of regulation and compliance at Jet2holidays, went further, warning: “LTAs are potential avoidance mechanisms.”

A Department for Transport (DfT) consultation on the changes ended last week. Bunce said: “The consultation asked ‘How much of your business is LTA?’ Most people will say ‘Hardly anything’. It’s the sort of thing that might happen by accident. The question is whether businesses will move to a model that fits the LTA definition because compliance costs are much lower.”

An LTA will be created when a consumer buys a holiday component such as a flight online and receives “a targeted link to another component offered by another seller”, leading to a second purchase within 24 hours.

Cooper said: “It doesn’t take a lot to send an email 24 hours and one minute after concluding a booking and it ceases to be an LTA. That worries me.”

Industry accountant Chris Photi of White Hart Associates agreed, saying: “The LTA is a poisoned chalice. How do you track it? We’re auditors and I don’t know how you’re going to create an audit trail for an LTA.”

David Moesli, deputy director of the CAA consumer protection group, told the seminar: “It’s a big challenge. With LTAs you’re only protected for part of the holiday and that is very difficult. People keep asking ‘Who is selling LTAs?’ We don’t have the answer at the moment.”

The DfT consultation sought the industry’s views on whether LTAs should be protected outside the Atol scheme. Moesli suggested the CAA is reluctant to see LTAs covered by Atol, saying: “If you give an Atol to an inferior level of protection, it will confuse the hell out of customers. A holiday with only partial protection will downgrade it [Atol].”

But Cooper argued: “If you try to create a separate framework [with] LTAs not protected under Atol, you’ll create a shambles.”

Thomas Cook Group head of public affairs Stephen D’Alfonso said: “We strongly support LTAs being part of the Atol regime.” He suggested: “Have a clearly defined Atol badge applied to packages and a new badge that relates to LTAs.” However, Photi said: “We have to get to a point of clarity, not one logo for this and one for that.”

The DfT promised “another consultation, probably in the spring, on all the detailed stuff and how this works in reality”.

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