With less than a month to go until the new Package Travel Regulations (PTRs) come into force, agents have been reminded they may be required to hold Atol licences for the first time under the new rules.
Two senior travel lawyers this week told TTG there are at least two scenarios which could foist Atol responsibility on agents, with the new regulations due to be enforced on July 1.
At present, agents work around an established definition of a “package” set out in the 1992 PTRs, albeit one extended in 2012 to include flight-plus bookings.
Under the new regulations though, the number of definitions of a package, or ways of creating one, has increased to six.
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With less than a month to go until the new Package Travel Regulations (PTRs) come into force, agents have been reminded they may be required to hold Atol licences for the first time under the new rules.
Two senior travel lawyers this week told TTG there are at least two scenarios which could foist Atol responsibility on agents, with the new regulations due to be enforced on July 1.
At present, agents work around an established definition of a “package” set out in the 1992 PTRs, albeit one extended in 2012 to include flight-plus bookings.
Under the new regulations though, the number of definitions of a package, or ways of creating one, has increased to six.
MORE: 10 things every agent should think about before the new Package Travel Regulations land
“There are two obvious new definitions which could lead to agents selling packages, for which they must have an Atol, that would not be the case at present,” said Alan Bowen, legal advisor to the Association of Atol Companies.
“The first is where the customer chooses two or more travel services and agrees to book them at the same time. At present, there needs to be an inclusive price, but this is no longer the case.
“So the agent issuing an invoice showing separate prices for each element will be selling a package whether they know it or not. This could be face-to-face, on the phone or online.
“The second is where the travel agent puts together a selection of travel services for the same trip but quotes a single inclusive price. That will also be a package, whether intended or not.”
The new PTRs also introduce Linked Travel Arrangements (LTAs) which, although not requiring Atol protection, do require a form of financial protection.
Bowen added while the definition of an LTA was still “far from clear”, LTAs would default to packages - requiring Atol protection - if agents failed to inform customers they were buying an LTA.
Rajeev Shaunak, partner at MHA MacIntyre Hudson, said the “wider definition” of a package under the new PTRs meant agents who might not previously have considered themselves package providers would have “much less leeway” to avoid becoming a package travel organiser.
“The CAA has made statements suggesting some agents were previously putting together what appeared to be package holidays but selling them under the Atol of the supplier of the air seat or, more often, where the agent claimed to be acting as an agent of the consumer,” said Shaunak.
“Both scenarios will require agents to hold their own Atol from July 1. For agents needing an Atol licence for the first time, they must get their applications completed if they haven’t done so already.”
Shaunak added first-time Atol holders would require bonding and an Atol reporting accountant.
Addressing Abta’s Travel Law Seminar last month, Stephen Mason, senior partner at Travlaw, warned new CAA boss Richard Moriarty’s proposed “moratorium” on enforcement of changes to the Atol scheme would, if applicable, only extend to a “tiny bit” of the “package travel scene” governed by the CAA.
Like Shaunak, he advised agents likely to be selling packages or Linked Travel Arrangements after July 1 “get on with” making arrangements for an Atol licence and not become complacent.
Meanwhile, the Department for Transport (DfT) last week set out its plans to modernise the Atol scheme, strengthen consumer protection, and bring it in line with the EU’s Package Travel Directive following two consultation exercises, one in October 2016 and another in February 2018.
The changes were outlined in the DfT’s formal response to its “updating ATOL consumer protection for package travel” consultation, which was held over four weeks in February and March and received 30 responses. The full new regulations are yet to be published.
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