The Association of Atol Companies has written to the Department for Transport urging it to ensure any airline credit note can be redeemed as a full refund at a later date by tour operators and travel agents.

Advisor Alan Bowen echoed Abta’s call for the government to follow the lead of the European Commission – but apply the same principles for consumer rights to agents and operators who have bought airline seats.

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He said airlines are refusing to refund tickets to trade partners, instead offering vouchers to be redeemed against future flights “at whatever fare the airline chooses”.

Bowen said this practice was “totally unacceptable” and “unsustainable” and pointed out that his members sell in excess of £4 billion worth of flights per year – all of which are Atol protected for consumers.

He wrote: “Our success depends entirely on the existence of a healthy aviation sector and they, together with ourselves are facing a cataclysmic collapse in demand at present due to CoVid 19. With no flights operating on most routes our members have nothing to sell and redundancies and short time working has already begun.

“We therefore would encourage the government to offer support to the UK aviation industry but would with respect expect that any support is dependent on airlines treating their agents and passengers with equal respect. At present, some airlines are simply refusing to refund tickets already purchased and paid for, insisting that the best they can offer is a voucher, to be used against the purchase of another flight at some later date, at whatever fare the airline chooses to sell it for.

Bowen added: “In some cases, where a skeleton service is still operating the airlines have gone further and insisted that passengers cannot have a refund even where the destination is closed to UK passport holders, for example the vast majority of Caribbean Islands. If passengers attempted to travel on the booked flight, they would either be denied boarding in London or the airline would be required to fly them back to the UK immediately and risk a fine imposed by the government of the destination country and yet the airline still refuses to refund the ticket.

“Furthermore, some airlines are imposing strict cancellation charges on passengers who have endeavoured to contact the airline or their agent to amend their booking but have not managed to get through before their flight is due to depart and have therefore been registered as a ‘No Show’. This means the full value of the ticket is lost.

“This is clearly  totally unacceptable, and an unsustainable position at present and we therefore request that any financial offers made are dependent on airlines following the guidelines issued this week by the European Commission (confirming the absolute right to refunds where flights are cancelled), as well as the basic contract law that where a contract cannot be fulfilled, the innocent party is entitled to a full refund.”