12 September 2008 - - Association of Independent Tour Operators
ANOTHER FINE MESS YOU’VE GOT US INTO, HMG...
Government-created two-tier travel industry causes chaos for consumer in the wake of XL’s collapse
XL Holidays, Britain’s third-largest tour operator, last night went into administration, grounding 21 planes and causing chaos for 85,000 people who are currently on holiday in addition to the 200,000 who were due to travel on its flights or via its collection of disparately-named holiday companies (Kosmar, Freedom Holidays, The Really Great Holiday Company, etc., etc.).
Says Derek Moore, Chairman of the Association of Independent Tour Operators (AITO): “We have long warned of the likely implications of the Government allowing a two-tier industry to exist, and here we have a prime example of what happens when things go wrong. Consumers who booked holidays through ATOL-protected tour operators, e.g. with AITO members, will be helped by their tour operator to find new flights – not easy when 21 planes each carrying 170 people on several flights a day have been removed from the flight market overnight. Additionally, the tour operator will cover all extra costs involved, which can be considerable.
“Consumers who booked holidays independently, e.g. direct with the airline and direct with their accommodation provider, will have to sort themselves out. If they can’t find new flights, or if the flights they can find are too expensive for them, they will still be obliged to pay for their accommodation - even if they can’t reach it. Unprotected consumers lose out both in terms of potentially losing their holiday and in terms of it costing them a lot more than they had budgeted.
“It’s a ghastly mess all-round, and needn’t have been so had the Government followed the travel industry’s recommendations - including those of its own select committee on transport - to insist that airlines were also brought within the remit of the ATOL regulations. That would have meant fair play all round, for consumers and for holiday companies.”
How can consumers ensure they don’t fall into the crack if an airline collapses?
1. Book with a fully-bonded tour operator, e.g. AITO member (www.aito.co.uk). This is the safest and least-hassle route, as it’s the tour operator’s responsibility to ensure you get your holiday and to absorb any and all costs incurred in rebooking flights, amending accommodation arrangements if necessary, etc.
2. Pay by credit card and the credit card company will refund the money lost – but it won’t cover any higher costs incurred re-booking flights late in the day. NB debit cards do not offer this cover or get you home if you are stranded abroad.
3. Buy airline failure insurance – but, again, be aware that - unless stated to the contrary in the policy - it won’t cover any higher costs incurred due to last-minute re-booking of flights. When airlines get into difficulty, airline failure insurance is sometimes withdrawn by the insurers.
To summarise, Derek Moore of AITO says: “In the current troubled financial climate, play it safe and book your trip away, whether short break or longer holiday, via a fully-bonded tour operator. You won’t lose flexibility – but you will lose the worry that your holiday might disappear or end up paying a lot more for it.”
Moore confirms that AITO will again be lobbying Government to bring the airlines within the ATOL remit to avoid repetition of this problem. “Two airlines – Zoom and XL – going bust in the space of two weeks ought, we think, be enough to make the Government reconsider the situation. Airlines can’t continue to claim that they are impervious to potential collapse with fuel prices being so high and with exchange rates so volatile.”
Ends
12th September, 2008
Note for Editors:
1. ATOL is the CAA’s Air Travel Organisers’ Licence. All tour operators selling flight-inclusive holidays are required to gain an ATOL licence, which means that the CAA monitors their finances closely and that the CAA will repatriate and refund their customers if a company fails.
2. Airlines are currently outside the ATOL system, although they sell holidays in exactly the same way that tour operators do (e.g. via XL.com in the XL situation).
3. This two-tier system means that some people on XL’s flights and holidays are protected while some are not – and it’s doubtful that the consumers concerned were aware of this differential when they booked their holiday or flight.
4. All 140 members of AITO (www.aito.co.uk) are fully bonded for the financial protection of their customers.
5. Many AITO members are currently working hard to re-protect their clients’ flights and holidays as a result of the collapse of XL the airline. All additional costs incurred will be absorbed by the tour operator and not passed on to customers.
6. If consumers booked a “dynamically packaged” holiday via a travel agent, they will need to check with their agent to find out if they are financially protected or not.
Press: For further information, or to interview an AITO spokesperson, please call Ian Bradley on 020 8891 4440 (i.bradley@travelpr.co.uk) or Sue Ockwell on 07831 126 356
