Dozens of leading travel firms have accused the government of "procrastinating to the point of absurdity" on supporting, or ruling against, so-called "refund credit notes" (RCNs).
The makeshift deferred refund regime has been championed by Abta, which says many firms simply cannot provide refunds in 14 days – as stipulated by the Package Travel Regulations (PTRs) – in the absence of pipeline monies, a lack of cash flow, and staffing reductions owing to furlough.
The travel sector has been waiting for months for a concession on the PTRs from the government’s Department of Business, Energy and Industrial Strategy (Beis) to ease the refund burden, despite more than a dozen European countries having taken the necessary action.
Abta has also repeatedly called on the government and the CAA to confirm explicitly Atol protection for RCNs will carry over from the original booking, which it says is enshrined in the Air Travel Trust payment terms.
Aviation minister Kelly Tolhurst last week told a hearing of the government’s transport committee the Department for Transport was working "at pace" with the Treasury to resolve the refunds crisis in travel, but did not expand on its efforts. "It’s quite complex," she said. "I know some other countries have done it. We’re trying to work with the Treasury to get a policy outcome."
However, a group of more than 70 leading figures in travel have decried the government’s efforts on refunds in a letter addressed to home secretary Priti Patel, ostensibly urging the government to scrap its proposed 14-day quarantine requirement for UK arrivals, and provide more support for the travel sector.
"The UK travel industry is currently severely challenge," read the letter, signed by the bosses of Abercrombie & Kent, Kuoni, Kirker Holidays and Caribtours, among dozens of others from across the UK’s travel and hospitality sectors – both outbound and inbound.
"The Package Travel Regulations were never designed to cope with a global pandemic. The government has been woefully slow to react and has procrastinated to the point of absurdity in terms of either providing support for, or ruling against, the concept of refund credit notes.
"Unlike many industries who can scale down their workforce very rapidly, travel companies still need to employ staff when business stops, to either cancel, or rearrange existing, often complex, bookings.
"In essence, this means that while facing up to a 100% cancellation of forward bookings, cashflows are stretched even further in order to look after and protect existing consumers."