Monarch collapse: ABTA addresses ATOL consumer protection


At this year’s Travel Convention in the Azores, Mark Tanzer, ABTA chief executive, addressed around 500 delegates with views on ATOL consumer protection.  

He said: “There’s a common thread that runs through the events of 2017, and that’s how tourism depends on a very close relationship between government, industry and the consumer.

The Monarch Travel Group failure shows that the current system of customer protection is not understood and has a gaping hole.

The ATOL scheme has for a long time been one of the central planks of consumer travel protection. It ensures that customers who buy flight-based packages will be repatriated or refunded if their package organiser fails. But the clarity of that definition has been blurred by the myriad ways in which travel arrangements are now assembled.

The new Package Travel Directive (that will be introduced in July 2018) will bring into scope agent sales of flights and accommodation (Flight Plus arrangements, which currently have a different level of protection to full packages) and also Linked Travel arrangements, which no-one yet fully understands. But, of course, customers will continue to book themselves either directly with airlines and hotels, or through aggregator sites.

It is a complicated picture, but two things would help hugely: firstly, the CAA needs to be more transparent in its communications. Part of the ATOL Regulations stipulate that even if you sell only one ATOL protected package a year, you have to advertise yourself as ‘ATOL Protected’.

Only five percent of Monarch’s passengers were travelling on Monarch package holidays, yet to the outside world Monarch was an ‘ATOL Protected’ company.

ATOL protection does not apply to a company, it applies to a particular set of holiday arrangements. And the CAA should be much clearer in telling people about this, as we are at ABTA. This really does matter when you have 110,000 people overseas and another 700,000 yet to travel.

The second point that needs to be addressed is the situation regarding customers who simply purchased a Monarch flight as a scheduled airline ticket. There is no repatriation scheme for these customers. Notwithstanding this, the government decided that they would repatriate everyone, free of charge, and try to recoup as much as it could from ATOL holders and credit card companies, who were not consulted, and certainly have had no say in the cost incurred.

This is completely unsatisfactory. The tax payer will end up picking up a large bill, whatever happens, and the industry is left wondering what is the point of ATOL protection if everyone gets brought home anyway? And it sets a precedent for the next airline failure, where customers will expect the same free repatriation.

Either the government sticks to the position that if you’re unprotected you’re on your own – which requires an honest communication campaign with members of the public – or they decide on principle to bring home stranded passengers, in which case they need to have a fighting fund raised by a levy on all airlines. ABTA has long argued for an all-flights levy, and been rebutted by successive governments, but surely the Monarch example makes an unanswerable and urgent case for revisiting the issue? I was heartened by the Secretary of State for Transport’s comments in the Commons yesterday that, after the repatriation, his ‘efforts will turn to working through the reforms necessary to ensure passengers do not find themselves in this position again’.

The current situation makes it virtually impossible for the customer to make an informed, rational choice, damages confidence in the industry, and is not sustainable. We look forward to working with the Department for Transport to develop a new approach to scheduled airline failure.”









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