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Holidaymakers are at "risk" after the Civil Aviation Authority lost a court case defining what a package holiday is, the regulator says.
Yesterday the CAA was refused leave to appeal a High Court ruling that found in favour of a travel agency who sell unlicensed package holidays.
Legal action against Travel Republic started last year for allegedly breeching Air Travel Organisers' Licensing regulations, magistrates found in the agencies favour as did the Supreme Court. The CAA said they were "disappointed" but that "the case covered an important point of law…to provide clarity for consumers and the travel industry about the definition of a package holiday." They called on the Government for swift reform to protect travelers - this month London agency Goldtrail collapsed leaving hundreds stranded abroad.
In a statement, the CAA said:
"This decision now leaves a large number of holidaymakers at risk in the event of a travel organiser failing.
The CAA is therefore urging the Government to move quickly to reform the ATOL scheme and introduce the proposed ‘Flight Plus’ financial protection in order to restore cover to consumers who may wrongly believe that they are currently financially protected."
Travel Republic managing director Kane Pirie refuted the regulators consumer protection warning.
Saying: "The robust and unequivocal High Court decision earlier this year now offers the industry and its regulator undeniable clarity as to how to properly interpret the ATOL regulations and we trust it will be welcomed as such."
CAA director of consumer protection Richard Jackson added:
"Over the past year we have been working with the DfT on proposals to reform the ATOL scheme, and we very much welcome the Secretary of State’s recent statement that he sees the need for reform.
Unfortunately, today’s decision means that much-needed clarity will now not be provided through the Courts, making it more urgent to push ahead to reform the scheme, ensuring that people receive the protection they expect, and often incorrectly believe they are receiving.
Recent failures, including that of Goldtrail only a fortnight ago, have highlighted that there is widespread confusion amongst the travelling public and the travel industry about when they are, and are not, protected by ATOL.
Today’s decision means that the sole avenue now open to minimise that confusion is reform of the scheme."
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