Online travel agents in the UK are seeking answers over whether flights sales of budget airlines like Ryanair will be covered under new consumer protection laws.
The new laws are expected to enjoy widespread compliancy after leading agent Travel Republic confirmed it is seeking its first Atol licence to be compliant under new Flight-Plus rules.
These have been designed specifically to capture holidays sold as separate components but at the same time and close a loophole in the package travel legislation which Travel Republic has exploited legally in the past.
However, the new rules require agents to have agreements in place with all suppliers, something which will not be the case with Ryanair which takes a famously antagonistic stance to third parties.
Without these agreements, agents packaging up Ryanair flights find themselves having to pay a £2.50 per person charge to protect them through Atol without knowing if regulatory body the CAA will actually pay out in the event of a claim.
In November firms will have to start issuing customers with official Atol certificates that in the case of Flight-Plus sales – a flight plus one significant component like hotel or car hire – sets out each individual component.
A source told Travolution that even Ryanair is probably unaware how much business comes from the trade with the budget carrier’s flights featuring in as much as 50% of many OTA’s holiday sales.
Trade association Abta is calling on the CAA to make flight-only sales of budget airlines when paid for on the agency’s corporate credit card exempt from Atol after it agreed for payments on customers’ credit cards.
This would allow travel agents avoid the Atol requirements but only for flight-only sales so it remains unclear how significant a change this would be, although it is suspected it could be used as a way to get around Flight-Plus.
Leading industry accountant and Atol expert Chris Photi, senior partner of Whitehart Associates, said: “I still believe perceive there to be a problem with Flight-Plus in relation to sales of Flight-Plus arrangements that include a no-frills carrier where the only way you can source the flight is as an agent for the consumer.
“Clearly such arrangements do not fall within the Atol scheme but make up a large proportion of the offerings of OTAs.”
Abta chairman John McEwan said: “I doubt we will have a positive dialogue with Ryanair so a loophole in the regulations will remain. Refunds from a corporate card will go back to the agent rather than the consumer but there must be a way to protect the consumer.”