The PTD – Let the Consultation begin!

Consultation begins on changes to the travel industry

The long awaited reforms for significant changes to the travel industry appear to have begun.

Last week the Government published it’s long-awaited (a polite way of saying ‘overdue’) consultation on implementation (due on 1st January 2018) of the new Package Travel Directive. Actually, this the first of two consultations; the second one will be on the detailed new provisions of the Package Travel Directive (“PTD”) and amendments to our law; but this first one is on the future of the ATOL Scheme within the PTD.

There are 14 consultation questions overall, and we highly recommend everyone to get involved and make representations, either on your own, or through a trade body, such as ABTA. This is important stuff about the future of your business!

At Travlaw, our initial view is that there are three notable areas which arise from the consultation document:-

  1. First of all, it is proposed that the ATOL scheme will continue. That was never a given. Actually, there are hints that the Government would have liked a solution from the private sector (e.g. bonds/insurance etc…), but they now recognise there simply isn’t time for such a big change in just over a year.
  1. Perhaps more interestingly, as you will know, the PTD changes the basis of regulation from place of sale to place of establishment of the business. That means that a business only needs to be regulated once, in its country of establishment, to sell to consumers throughout the EU. That is a significant change away from the current requirement for regulation in multiple countries. In response, the Government proposes that the new ATOL scheme will be extended so that UK established businesses can sell to consumers all over the EU under their ATOL. This would be a massive extension of ATOL, and a sign that the UK will compete for business with other member states to be an attractive place to do business. Much will depend on the cost, and of course the cost of rival schemes throughout Europe. There is, of course, the great unknown – what does “Brexit means Brexit” mean in this context?
  1. Finally, for Linked Travel Arrangements (“LTAs”), the Government is considering whether to legislate that these be secured by private sector means, and not by ATOL, even where the LTA includes a flight; lest consumer confusion is caused by the low level of protection given to LTA’s which might cheapen the ATOL badge. And it is recognised that logically, those ‘flight-only’s’ currently subject to ATOL would probably also have to be moved outside the ATOL regime as a result.

So, again, this is your chance to have your say. Don’t waste it! The full consultation paper is on the DfT website.

And of course if you have any questions, please ask Stephen, Matt or Farina here for advice on how this affects your business.”

The Travlaw Team

This article was originally published on: 31 October 2016

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