Govt criticised for not reforming regulations after Monarch collapse

Travel companies have criticised the Government for letting consumers and the industry down after failing to learn from the collapse of Monarch two years ago.

Members of AITO, the Specialist Travel Association, expressed regret that Thomas Cook has gone out of business, and urged the Civil Aviation Authority and the Department for Transport to urgently reform the financial regulation system.

AITO chairman Derek Moore said part of the blame for Thomas Cook’s collapsed lies with the Government.

He said: "Consumers and the industry have been let down.

"AITO and other industry bodies were hoping that, by now, the Government would have implemented the reforms suggested by the Airline Insolvency Review, chaired by Peter Bucks, post the Monarch Airlines collapse.  Nothing has yet been done – probably because all minds have been focused on Brexit."

Moore said the CAA APC, currently £2.50 per passenger flight, has built up the Air Travel Trust Fund to a level of about £200 million, despite having been used in part to repatriate ATOL-protected clients after the Monarch Airlines collapse two years ago. But there is still no levy on airline seat sales.

He said AITO feels strongly that a repeat of such action (ie repatriation of non-protected purchases, first implemented after the Monarch collapse) undermines the whole ATOL protection system.

"Another concern is that the insurance and credit card industries will suffer considerable losses and will therefore harden their stance vis-à-vis all travel companies due to the Thomas Cook collapse," Moore said.

He added "Part of the blame for the collapse of Thomas Cook lies with the Government.  It has let so many online companies grow and prosper while totally unregulated that the travel industry is now split in two – one half is highly regulated and the other half is free to do pretty much as it wishes.  This has created huge inequality within the industry. The playing field is anything but level.

"It is pretty much the same as comparing unregulated online retailers with traditional bricks and mortar retailers; there’s a huge mis-match between the two in terms of costs incurred due to regulation and tax regimes.   

"There is no doubt that poor regulation has played its part in the collapse of Thomas Cook.  While it is unfortunately too late now for Thomas Cook, it is not too late for others if the Government acts with all due speed."

The Government said on Monday it would fast-track an investigation into Thomas Cook’s failure.