Unfortunately there remains no concrete guidance or steps from government. We are waiting for clarity on the refund process and options and will update you as soon as we know more. We understand your frustrations and worry and are doing our utmost for our clients. In an ideal world, we would refund everyone in full as soon as possible but Full Circle Travel cannot refund until we receive the money back from the holiday provider and that is simply not happening at the moment.
ABTA LAUNCHES CAMPAIGN WARNING GOVT OF ‘BILLIONS’ IN REFUNDS SHOULD FIRMS FAIL
Abta has launched a campaign calling on the entire industry to lobby the government for changes to the PTRs, warning that should businesses go under, the taxpayer would be liable for billions of pounds of refunds – which the Atol scheme would not be able to cover.
The association is appealing to its membership, the wider travel and tourism industry, all travel agents and tour operators, their families, and anyone else who supports the industry and wants to protect the future of the industry, to contact their MPs.
Abta says it first called for urgent government intervention to support the travel industry and take action around refunds and other measures several weeks ago.
But since then, despite multiple discussions with and letters to the relevant government departments and the prime minister, it says it is “still waiting for action” on the government’s promise to “do whatever it takes” to protect businesses and jobs.
Abta is asking individuals to visit its new “very easy and quick to use” microsite savefuturetravel.co.uk and send an automated electronic letter to the relevant MP, highlighting the industry’s asks.
Iata: ‘End airline cash refunds for cancellations’
To compound issues further, Iata has written an open letter to the trade confirming the substitution of vouchers for cash refunds for cancelled flights during the Covid-19 lockdown.
As a consequence, De Juniac tells agents: “On the issue of airlines withholding ticket refunds in the BSP, or issuing vouchers in lieu of refunds, I’m afraid the message is not one that will provide comfort.
“Our industry is experiencing a critical liquidity crisis. Most airlines are spending more cash in reimbursing passengers than they receive in new booking revenues.
“We recently estimated the industry’s liability in this area at $35 billion.
“In this context, airlines’ most urgent need is to keep their remaining liquidity to pay salaries and face their fixed costs.
“It is practically impossible for industry players to find sufficient financial means to keep the air travel value chain operating in the short time airlines have before facing bankruptcy.
“The best answer for both airlines and travel agents is for regulators to ease requirements for cash refunds and allow airlines to issue vouchers instead.
Vouchers replace refunds across Europe
Travel companies in Europe’s major outbound markets are being forced to flout Package Travel Directive (PTD) rules on consumer refunds or face financial ruin with all short-term bookings cancelled.
Tour operators and travel agents are looking to replace refunds with vouchers or refund credit notes, and the governments of Italy, France, Belgium and Denmark have already confirmed vouchers will suffice in place of cash refunds despite the PTD requiring consumers be refunded within 14 days.
Lawyers point out consumers are unlikely to be able to recover money through the courts as legal systems across Europe are barely functioning amid the coronavirus lockdown.
Leading UK industry lawyer Stephen Mason, senior counsel at Travlaw, said: “Refunds are due for cancelled holidays but nobody can afford to pay them and suppliers are not giving money back.”
He told an International Travel Law Network video conference this week: “The advice we’re having to give [industry] clients is not so much what the law says but solutions that might work in the real world regardless of whether it’s the strict letter of the PTD.”
Klaus Siebert, partner at law firm Engels-Siebert in Dusseldorf, said: “In Germany, the PTD means the tour organiser would have to pay back within 14 days.
“But what happens now in Germany is that all tour operators and cruise companies simply offer credit refunds – future credits or vouchers – with different validities, from up to the end of the year to up to December 2021.
“Of course, consumer associations say this is not compliant and there needs to be payment in 14 days.
“The German travel association is discussing this with the government and the government has called on the EC to say ‘Bring out guidelines’.”
Siebert said: “We know certain countries – Italy, France, Belgium, Denmark and others – have put in place a voucher solution.
“In Germany, that is still not in place but all the actors in the market work with a sort of voucher solution. There is no one paying back [money].”
Micheal Wukoschitz, of CKW Lawyers in Vienna, said: “In Austria, it’s the same. All my clients try to offer vouchers to customers, sometimes with some add on.
“But no traveller can be forced to accept such a voucher because of the PTD.
“Austrian travel associations are trying to get some sort of solution like the Italian or Belgian system, but there is great opposition from consumer associations and I don’t think the industry will succeed in getting an exemption.”
However, Wukoschitz said: “At the moment the court system isn’t really working. All court hearings are cancelled or delayed. So if a traveller filed a lawsuit now it would take a lot of time for a judgment.”
Mason agreed, saying: “That is similar to the UK. The court system is not really functioning so for consumers to enforce their rights is difficult, and by the time they can enforce their rights holidays may have started again.”
EasyJet boosts cash reserves to £2.3bn
EasyJet has secured £600 million in credit through the government’s Covid Corporate Financing Facility (CCFF) as it looks to maximise liquidity.
Announcing the new facility, easyJet also confirmed it has requested to fully draw down on a $500 million revolving credit facility, secured against its aircraft assets.
Together, the additional funds would give the carrier access to cash reserves of £2.3 billion by April 9.