14 Jan

Package Travel Regulations: transfer services – are they carriage of passengers?

The following article was first seen in ABTA's Travel Law Today Autumn 2018 edition and written by Matt Gatenby, Senior Partner, Travlaw LLP.

So, we have new Package Travel Regulations. New legislation, of course, comes with new questions. This piece looks to break down (and build back up) one of the issues still with a red circle around it – the somewhat controversial question of the status of transfers.

As a legal article it is apt, and only ever so slightly trite, to start with definitions. The new Regulations are pretty clear as to what the four “travel services” now are and “Carriage of passengers” is the first such service to be listed. There is no wider definition however in the Regulations. Recital 17 of the pre-amble to the European-level Directive provided some insight by saying that services which are intrinsically part of another travel service should not be considered a travel service in their own right. The specific wording used was that transfers would not be a travel service if they were “minor transport services such as carriage of passengers as part of a guided tour or transfers between a hotel and an airport or a railway station”. A great start – the very source of the new Regulations makes it clear that those making the law didn’t consider a transfer between an airport and a hotel to be a travel service in its own right.

The later Guidance published by the UK Department for Business, Energy & Industrial Strategy (BEIS) agreed, stating that the definition of carriage of passengers included “Flights, trains and coaches” (Para 5i), but omitted transfers. Again, the BEIS Guidance referred to Recital 17 of the Directive, showing that they were in lockstep on that point.

However (and isn’t there always a however?), the question is not completely answered. The Recital 17 example uses the word “minor”, which is key, and should be the focus whenever there is a question of whether a transfer of some kind is capable of being a travel service. If the transfer is not minor, it could well be a full travel service in its own right as carriage of passengers. A useful example comes from an older case that went to trial back in 2003 under the old Regulations: Keppel-Palmer v Exsus Travel [2003] EHC 3529 (QB).

In Keppel-Palmer, the holidaymakers purchased a luxury villa to stay in over the millennium, paying no less than $140,000 for a month’s stay. Notably, the villa came with an available limousine transfer to and from the airport. In short, the customers were unhappy with various aspects of their stay and one of the issues to be determined at trial was whether the holiday was a package in the sense that the villa was “accommodation” and the limousine transfer was “transport”.

The High Court Judge, in that case, decided it was not a package for a number of reasons. The limousine would amount to a “de minimis” element not capable of making up a discrete transport element given the overall circumstances. So, it was a small element, a minor element. There is that word again – minor. The Judge set out that it was “a question of fact and degree” in that specific case.

Keppel-Palmer is, in fairness, open to some debate – the transfer would have been 45 minutes, which is not that short, and a limousine is by definition a transfer one could consider a cut above a coach or standard taxi. The clear  thinking was that, in that particular case, given a $140k villa for a month, whatever the carved-out cost of the limousine, it was insignificant compared to the overall cost, and the 45 minutes insignificant compared to a 30-day stay.

Pulling all this together, the general rule of thumb is going to be that if a transfer can be considered minor it is not going to be a discrete travel service. It’s a fairly wide rule, but one that probably suits the industry in most cases. The majority of transfers are going to be the typical array of coach, taxi and similar services and will fall neatly in the minor classification whether the cost is factored into an overall price or a separate fee is paid.

Issues that might give cause for further thought are varied. For example, where a holiday comprises a train journey from Schiphol Airport to Dusseldorf to get to the accommodation, the train element is unlikely to be considered minor. Also, consider where a transfer might otherwise not be an intrinsic part of an existing travel service and might in itself qualify as a tourist service. For instance, a combination of accommodation in a ski resort plus a heli-skiing service to take customers to the top of a ski-run would be unlikely to qualify as a “minor transport service”, and would be caught as being a tourist service or carriage of passengers capable of being its own travel service. Lastly, even if a transfer is going to be classified as carriage of passengers, if it is being combined with another form of carriage of passengers, that is not going to be an issue as at least two different forms of travel services are required to make a package. A flight and a transfer, alone, will never be a package.

Of course, if a transfer is minor because it is intrinsically part of another travel service, it will be part of a package where that travel service is packaged with at least one other different travel service and there will, for example, be liability on the package organiser if the transfer is not properly performed.

Coming back to the main question – if you have a transfer that you think is minor, your gut feeling is probably to be trusted. Almost certainly this will include a typical transfer from an airport to nearby hotels and resorts. Conversely, if you consider such transfers don’t fit into that category further thinking is required to make sure that any uncertainty can be quickly and easily resolved, one way or another.