Dynamic packages still need ATOLs – CAA

The Civil Aviation Authority has stressed that ATOLs are still needed for dynamic packages which include flights.

In its detailed response to last month’s appeal court ruling, the authority added that travel components sold in combination and at a price which covers all of the elements are a ‘package’ irrespective of how the sale is documented or the capacity in which the organiser claims to act.

The CAA said the intrepretation of ‘inclusive price’ which was given in the original High Court ruling in January was changed by the Court of Appeal.

“Consequently this practice by travel companies should cease and this will be to the benefit of consumers,” the CAA said.

Agents and operators had thought the Appeal Court judgment would free them from the costly requirement of obtaining ATOLs for dynamic packaging.

But the CAA said: “The consumer needs to be able to make a properly informed choice between securing ATOL protection or not. Otherwise consumers will not kow whether they could find themselves stranded abroad or lose out financially if their travel company fails.

“They may also have no recourse to a UK travel provider if there are problems with their holiday arranagements, including health and safety issues.”

The authority said a number of travel companies failed in the summer selling travel components together but not at an ‘inclusive price’ and without an ATOL.

“These sales were made on the basis of an interpretation of the original High Court decision in January and the collapses resulted in consumers losing substantial amounts of money,” the CAA said.

The authority is now discussing the October judgment with the travel industry, Department for Transport and Department for Trade and Industry “with a view to determining how the judgment can best be translated into practice”.  

CAA consumer protection group director Richard Jackson said: “We are pleased that the Judgment confirms that dynamic packages involving flights fall under ATOL protection. This is particularly important given the significant increase in the sale of dynamic packages.

“However, there is still potential for confusion in the sale of travel products. We think it is important for the consumer to be able to make an informed choice. Is he or she buying a package, with all the protection that goes with that, or are they buying components, not in combination?

“Such components sold separately are unlikely to be protected, and could potentially leave customers stranded abroad and out of pocket if the retailer fails, and with no comeback to a UK based travel provider if anything goes wrong with their holiday arrangements.

“If consumers want comprehensive protection then they should continue to

book flight packages under ATOL protection”.

Report by Phil Davies