14 May

Furlough extension buys time, but a wider Government strategy is still required

It has been another eventful week for our industry as we continue to deal with the impact of the pandemic on the travel sector.

The Government’s announcement this week on the extension of the furlough scheme will have been welcomed by many Members. They have also stated that they will introduce more flexibility to the scheme, enabling employers to bring back some staff in a phased or part-time way so we will be keen to look at the detail of how this will work in practice. ABTA has been lobbying hard for the scheme to be extended and for additional flexibility to be applied, so it’s encouraging they have listened and acted, at least on this matter.

On Wednesday, the European Commission added weight to our asks regarding Government support by issuing a new Recommendation for refund credits. The Recommendation, which applies to the UK, provides guidance on the appropriate use of vouchers by Member States to ensure they cover passenger rights. A supporting statement also said that Member States authorities should ‘contribute to informing all parties concerned about this Recommendation and cooperate towards its implementation’.

This Recommendation should place more pressure on the Government and the CAA to state clearly and publicly that Refund Credit Notes are financially protected. It’s important to note that public confirmation of the status of RCNs is not the same as changing the Package Travel Regulations. The law does not need to change for credit notes to be financially protected because the Air Travel Trust fund payment policy states deferred refunds remain financially protected, which the package holiday advice on the CAA website also refers to.

Looking ahead, we are urging the Government to develop a clearer strategy to facilitate recovery in the industry.  This includes looking at rebuilding the travel insurance market and highlighting that any steps they introduce to ensure travellers are safe are proportionate and backed by health and scientific advice. We hope that this will be clearly communicated in due course by the Government’s departments and its senior Ministers so people can start looking forward to when they can go on holiday.   

Mark Tanzer, Chief Executive