EC urged to extend consumer financial protection to carriers

Airlines should be subject to the same financial protection requirements as tour operators, according to the head of the European association of travel guarantee funds (EGFATT).

Mark De Vriendt, EGFATT chair and general manager of the Belgian guarantee fund (Fonds de Guarantie Voyages), said: “Airline failures affect more travellers than travel business failures. Airlines do not protect their travellers [from failure].”

The guarantee fund acts like the UK’s Air Travel Trust fund in paying to refund or repatriate customers in the event of a travel organiser failure.

Speaking at the first Travel Payment Summit organised by the European travel agents’ and tour operators’ association ECTAA in Brussels, De Vriendt said he had a message for the European Commission: “Forget the travel industry for once and focus on the airlines.

“If you want to protect travellers, protect all of them.”

De Vriendt noted the bankruptcy rate among travel companies “has come down to the lowest rate – the same level of bankruptcy as among banks and insurance companies” and said: “Why? Because there is financial control.”

He argued: “Why does the EC not protect other large consumer payments? Why does travel have this burden.

“Tour operators are responsible for the failure of an airline, for the hotel, for the transfers, for the tours, and if there is a fault [in the holiday] the operator is responsible.”

De Vriendt suggested: “Some travellers are more equal than others.”

The UK Civil Aviation Authority (CAA) and Air Travel Trust are associate members of EGFATT.

Speaking at the same summit, Brussels-based lawyer Heleen Mulkers argued the imbalance between smaller companies and the industry’s biggest players, including airline association Iata, imposes “a financial burden” on tour operators and travel agents.

Mulkers, partner at law firm Dugardyn & Partners, told the summit: “The customer, travel agent and tour operator relationship is covered by the Package Travel Directive [and the requirement] to pay refunds within 14 days.

“[But] tour operators do not have the same cover with suppliers. Those relationships are governed by commercial contracts [and] the best terms and conditions are with the biggest players.”

She suggested Iata “is such a powerful player, it pushes the financial burden [of paying consumer refunds] on to tour operators”, arguing: “There is an imbalance between Iata and tour operators.”

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