Tanzer urges Govt: ‘Change rules on refunds or fund them yourself’

ABTA chief executive Mark Tanzer has urged the Government not to walk away from the travel industry during the Covid-19 crisis.

Speaking to the Commons Transport Select Committee on the impact of Covid-19 on travel, Tanzer said ABTA’s first preference is for the Government to agree to changes to current regulations over refunds to give members longer to pay.

But if the Government does not want to do that, it should fund the repayments itself, he said.

"We have never said customers aren’t entitled to a refund. We are completely in line with the Competition and Markets Authority that that right exists," Tanzer told the hearing.

"We have asked the Government to extend the 14-day window in which the refund should be paid because we want to give companies a bit more breathing time to be able to pay those funds.

"We have given lots of evidence to BEIS (Department for Business, Energy and Industrial Strategy)  to justify why that’s important. They haven’t seen fit to move yet but we think that’s an important step they could take to help. But the right to a cash refund is still there.

"If the Government doesn’t want to do that, then the way to save travel companies and jobs is for the Government to intervene directly to say: ‘We will repay those refunds where the company can’t pay it."

That way, Tanzer said: "The company will survive, so the refund can be repaid to the Government."

He added: "If the Government walks away from this altogether, that would not go well. People whose businesses have been running for 20-30 years are on the point of closing down.

"We are not crying wolf. I’m very fearful that this will not only damage the sector but the recovery will take a very long time. It’s in nobody’s interest [for travel companies to fail]."

He told Transport Committee chairman Huw Merriman: "We engaged with [the CAA] very early. We had verbal confirmation that the existing terms of the ATOL scheme do cover these deferred refunds and the payment policy of the Air Travel Trust absolutely confirms that.

"It’s really important that the CAA come out and say that explicitly. We believe it’s the case, legal advice says it’s the case. For whatever reason, the CAA hasn’t come out and said that. That means customers aren’t sure. They’re not sure whether or not these deferred refunds really are protected.

"You asked what Government should do. The first thing they should do, through the CAA and ATOL is to say: ‘Yes, we are standing behind these deferred refunds,’ because it is in everybody’s interest that people have confidence in that scheme."

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