It’s a TIING Thing!
by Katherine Leppard, April 20th, 2012
Despite, the rain pouring down and last minute change of venue due to floods (!) the TIING networking event yesterday was great fun!
Here are some pictures of our lovely Tiingers at The Phoneix, Victoria.
TIING is a Linkedin networking and information exchange group for directors, owners and senior managers of tour operators, travel agencies and their professional suppliers.
The purpose of the group is to share and discuss industry information and developments, share expertise and to provide networking opportunities for its members.
In the current membership there is a diverse group of directors, owners and senior managers in the travel profession including tour operators, agents, lawyers, social media, PR, insurers, recruitment and regulatory.
Join the discussions and receive invites to future get togethers at LinkedIn.
ATOL Reform
by Katherine Leppard, April 13th, 2012
ATOL reforms– CAA respond to the industry’s calls for an extension to the implementation of the reforms.
In response to the industry’s unrest about the looming deadline for the implementation of the ATOL reforms (30 April 2012), the CAA have announced a ‘focus on education’ during May – Does that mean they will not take enforcement action?
The reforms – brief overview
The ATOL regulations come into force on 30 April 2012 and make changes to the current ATOL regime which include the following:-
- Addition of Flight-Plus – sales of outbound flights with accommodation or car/hire require the business to hold an ATOL.
- Retail agents selling Flight Only will need to hold an ATOL unless they meet the specific exemptions.
- ATOL holders are required to have written Agency Agreements with all retail agents.
- ATOL certificates must be issued immediately on booking and state what type of booking it is (ie Package, Flight-Plus or Flight-Only). This change comes into force later on 01 October 2012 and applies to all travel companies not just those who are the ATOL holders.
The purpose of the reform of the regulations is to provide greater protection and clarity to consumers. This is important for any industry to generate confidence in the consumer market. Having witnessed the impact of failures of some large travel companies in recent years, it was clear that the protection for consumers to the travel industry could be vastly improved.
Whilst, the industry have generally supported an increase in clarity and protection for consumers and these reforms do seems to take us a step in the right direction towards achieving a satisfactory level of consumer protection, airlines are still not included. Although there is some debate about this across the legal profession, the government state that primary legislation is required in order for airlines to be brought into the ATOL regime. The Civil Aviation Bill includes sections relation to ATOL reform which will allow for further regulations to be made in relation to airlines. The government have announced that (if the Bill is passed through parliament) they will consult on further regulations for airlines to bring them in the scheme in 2013.
For now we are focussing on the effects of the current reforms and the imminent deadline of 30 April 2012 at which time the CAA could take enforcement action against any company not complying with the regulations.
The deadlines and the CAA position
Whilst the industry has been aware that reforms would take place for some time and there was a long consultation process, the industry has taken serious objection to the limited information provided up to the issue of the wording of the final regulations and the implementation of them.
The industry has therefore called for an extension to the implementation on 30 April 2012. The government were not willing to extend the deadline.
The CAA have announced that during May they will continue to focus on education and assistance to the industry in meeting the regulatory requirements. Does this mean that they will not be taking enforcement action for those (inevitable) companies that will not be able to comply in time? The CAA do not answer this question directly but they say they will focus on education and assistance to the industry “except where businesses are not taking appropriate steps to comply”. To me this means that if you can show you are trying to comply and are making reasonable attempts to do so, the CAA are more likely to seek to assist you rather than prosecute you – until 1 June 2012 where they will revert to their “normal enforcement stance”.
Consumer protection in the transition period
The good news for consumers is that the Air Travel Trust has announced that they will be sympathetic to consumers during this transitional period who claim for package and flight-only sales where agency agreements are not in place or where documentation falls short of the new requirements. So, there is at least the saving to the industry reputation that if companies go bust through trying to implement the reforms, the consumer is most likely to be protected.
ATOL deadline 30 April – are your agency agreements in place?
by Katherine Leppard, April 5th, 2012
The Department of Transport has today published and laid the long awaited final version of the ATOL regulations before parliament and they will come into force on 30 April 2012.
The ATOL reforms require ATOL holders selling through Agents to have a written agency agreement in place with those Agents.
The deadline for agency agreements to be in place is 30 April 2012. If, after that date, a sale is made by an Agent on behalf of the ATOL holder without the required written agreement being in place, the new regulations will have been breached by both the ATOL holder and the Agent, leading to possible sanctions being imposed by the CAA.
Whilst the CAA published draft mandatory terms to be included in the written agency agreements a few weeks ago, the final version could not be formerly produced until final regulations were published. ATOL holders and Agents now have only 10 working days to ensure that they are complying with the regulations and we are still waiting for the final version of the mandatory terms.
ABTA have branded the timetable unrealistic and the industry is still calling for the DfT to extend the timetable. There are fears that travel companies will have to reduce trading if they do not have the written agency agreements and requisite ATOLs in place by 30 April and that this may cause the failure of some businesses.
ABTA had announced plans to launch an ABTA-ATOL Joint Administration Scheme but we are still waiting for details on this.
If you are looking for advice on the new regulations, agency agreements or ATOL, please contact our travel law team.
What’s the drama with cruise ships lately?
by Guest Blogger, April 4th, 2012
There has been a lot of press lately about cruise ships and disasters – coinciding nicely with the Titanic centenary shortly upon us.
Of course the Concordia accident in January was a terrible tragedy and the blame has been firmly laid with the captain of that ship. I was speaking to a CEO of another cruise line about how can a captain just steer the ship where he wants, and it turns out that he cannot – under any circumstances -deviate the course of the ship without the signature of 3 deck officers and a shore-side captain too – so Captain Francesco Schettino and the other deck officers really did disregard standard procedures.
Another Costa ship lost power and then more recently the Azamara Quest experienced a small engine room fire and lost propulsion for a while – however it was extinguished and the ship made it to port. We had a couple of guests onboard that sailing and they sent us an eyewitness account – you can read it here. Azamara Quest Fire from a passenger perspective http://www.theluxurycruisecompany.com/luxury-cruise-blog/blogs/azamara-quest-fire-from-passenger-perspective-264/
The way that Azamara Club Cruises handled the situation on board was exemplary, and also to be commended was the way they handled the PR – they immediately advised of the compensation package (all money back for that cruise plus a free cruise in the future, hotel stays and flights all paid for, plus more, and the president of the line flew out to meet the guests) In all the press coverage I have read there has been nothing but praise for the staff and crew onboard – so props to Azamara for showing Costa how to handle a situation well.
But how safe is a cruise? Lets put it in perspective – While even one death is one too many, between 2005-2011 cruise lines carried more than 117 million passengers with a total 21 deaths related to marine casualties. That is less than 0.18 fatalities per million; in comparison there were nearly 16,000 fatalities on the UK roads for the same period, yet we all still drive cars.
Cruising is a very safe form of holiday – each ship has a detailed emergency plan and every member of staff is allocated and trained to undertake a safety role if there is a problem. Staff continue to be trained and practice regularly even while they are at sea. Regular completion of practice safety drills is a requirement of maritime law.
In light of the Costa incident, cruise lines have voluntarily agreed to operate the lifeboat drill for passengers before leaving port, as opposed to within 24 hours as current law dictates.
Cruising remains statistically one of the safest forms of holiday available.
Scott Anderson
Scott Anderson is General Manager for The Luxury Cruise Company, based in Hove.
Time for new legislation for cruise industry
by Guest Blogger, January 17th, 2012
The recent grounding of the Costa Concordia is a very tragic accident and our thoughts and prayers go out to those families who have lost loved ones.
The media have been having a field day printing all sorts of mis-advised facts and figures, in what amounts to - in my mind – sloppy journalism. Still that’s the news media today –never let the facts get in the way of a good story.
Carnival Corp, the parent company of Costa Cruises, have already issued a statement saying that it was human error that caused the accident. Apparently the captain steered the ship off its normal course to wave to an ex crewmember on the island of Giglio. This may seem an absurd action to take, however I have been onboard ships where the captain has altered course to sail past his home town and sound the ships horn. In time, once the investigation is complete, we will know for sure what happened.
Time for new legislation I think from SOLAS (International Convention for the Safety of Life at Sea) that govern the rules onboard the world’s cruise ships. These rules c0ver smoking areas, the amount of wood allowed onboard, the number of lifeboats needed, fire-fighting equipment etc. That’s why a lot of the old traditional liners have been scrapped – as it would cost too much money to bring them in line with the latest SOLAS standards.
That is a real shame as there are so many wonderful old ships sent to the Alang scrap yard in India to be broken up. Many cruise lines are building bigger cruise ships, however there is a trend in the luxury cruise market to build smaller vessels. These 6-star cruise ships carry from just 49 guests to 700, and offer all-inclusive luxury.
Carnival Corp also owns such a brand, Seabourn, and has built three new ships over the past four years, to compliment their existing fleet of three smaller vessels. These new ships, Seabourn Quest, Seabourn Sojourn and Seabourn Odyssey carry just 450 guests.
On these ships you can want for nothing, everything is included, champagne on tap, butler service, amazing cuisine and superb service. Cruise ships can be thought of like hotels, just on the water, and they are assigned star ratings too, based on their levels of cuisine, service, accommodation etc – much like a 3-star hotel would be OK, and then the Ritz would be a 6-star hotel.
All this luxury comes at a cost of course – however fares are coming down and you can get a seven-night cruise with flights from about £1,599 per person. The price of the Costa cruise by comparison would cost about £599 per person, but you do get what you pay for.
Another big advantage of cruising on a luxury cruise ship is that it wont take 2 hours to evacuate in an emergency.
By guest blogger Scott Anderson, General Manager of The Luxury Cruise Company
Ryanair’s new debit card – controversial but is it legal?
by Katherine Leppard, September 20th, 2011
The only way for consumers to avoid “admin fee” is to pay using Ryanair’s branded debit card – its controversial but is it legal?
Ryanair have announced that they will launch a new debit card in October and from 1 November 2011 customers will have to pay using this card to avoid paying Ryanair’s fee of £6 per flight per passenger (which adds up to £48 for a family of four on return flights).
Currently, Ryanair applies the same principle but passengers can pay using any Mastercard pre-paid card to avoid the charges. Limiting this to one Ryanair branded card is a significant limitation leaving consumers no choice but to buy that particular card or pay the extra charges – consumers are effectively prevented from shopping around for a Mastercard pre-paid card that suits them.
Which?, the consumer advocate, raised a ‘Super Complaint’ against payment surcharges and a particular focus of this complaint related to airlines. Which? estimates that £300 million was spent by consumers in 2010 on payment surcharges in the travel airline sector alone.
The Office of Fair Trading’s (OFT) response to this super complaint said that [under the current legislation]:-
- it is misleading to separate compulsory charges from the headline price. A payment surcharge is compulsory if a reasonable proportion of consumers have to incur additional costs/significant time to avoid paying them.
- Where there are surcharges there should be clear “1-click” information available to consumers on the level of charges applicable to different types of cards and any discounts available.
In the current regime Ryanair do however have an argument to say that consumers have the option to pay by Mastercard pre-paid cards which are readily available at no additional cost and on that basis it could be argued that the payment surcharge is not compulsory and so does not need to be included in the headline price. However, on the basis of the guidance from the OFT, this argument may become less viable when only customers with a Ryanair debit card can be excused the fee because the options available to the consumer are significantly more limited.
It will however be for the OFT to bring proceedings under the Consumer Protection from Unfair Trading Regulations 2008 if they consider Ryanair have mislead consumers by failing to include a compulsory charge in the headline price.
The OFT also made the further recommendation that legislation be implemented to ensure that:-
- Any costs the retailer incurs for processing debit card payments should be treated as part of the cost of doing business and included in the headline price (note that charges for other methods of payment can be charged separately. For example credit cards under the Credit Card (Price Discrimination) Order 1990).
This means that Ryanair’s (and other airlines) additional charging days may soon be over when the Consumer Rights Directive is implemented which seeks to limit the amount of any surcharge to the cost to the trader.
Atol reform consultation ends today
by Katherine Leppard, September 15th, 2011
As the Atol reform consultation comes to a close, the responses from the travel industry are flooding in and sparking debate.
It is fair to say that it is agreed that reform of the Atol scheme is necessary because the current system does not provide adequate financial protection to consumers and this has been demonstrated in the recent collapses of travel companies such as Goldtrail and the latest being Holidays 4UK Limited.
The Department of Transport produced some draft regulations which were put forward for consultation in February 2011. This consultation ends today.
The main issues for debate that have come to light are, the timetable for implementation and whether airlines and business travel should be specifically excluded from the regulations.
Enough time for travel companies to comply?
ABTA raises a serious concern in relation to the government’s timetable to bring in the reforms in that the industry is going to struggle to put in place all the practical elements that come about from the reforms such as changes to systems and documentation. This represents concerns echoed across the industry and provides added pressure to the industry particularly in these times of economic downturn. There should at least be a phased introduction to allow travel companies to make the necessary arrangements and take appropriate advice.
Business travel to be specifically excluded?
The Dft has sought to exclude business travel by providing an exemption for credit sales but this will not exclude all business travel. ABTA have proposed to specifically exclude sales to limited companies as a measure to exclude business travel. This will assist but those companies selling only business travel will have to be careful to ensure that they do not fall within the Atol scheme.
Airlines to be specifically excluded?
ABTA supports the proposals from the DfT but calls them the ‘first step’ towards improving financial protection for consumers. The second step being the inclusion of airlines.
In contrast to ABTA’s response, the Board of Airline Representatives (BAR UK) is highly critical of the draft regulations. Amongst various criticisms made, they call for the regulations to be re-written to specifically exclude airlines.
The DfT maintain that in order to include the airlines in any Atol regulations, primary legislation is required. This essentially means that a Bill must be passed through parliament whereas the current draft regulations can be made under the powers conferred by the Civil Aviation Act. If this is correct it would mean that even if the regulations could be interpreted to apply to airlines, they would not be legally enforceable.
In a statement made to Travel Weekly yesterday the DfT confirmed that primary legislation will be required to bring in airlines. Primary legislation is planned in the form of the Airport Economic Regulations Bill and the parliamentary process is due to being in the next parliamentary session - (early 2012).
What’s next?
It is now down to the DfT to take on board all these comments and to consider how they may best proceed.
It is fairly possible that this will result in a delay to the reforms. The Airport Economic Regulations Bill may even catch them up which may prevent the need to amend the regulations to exclude airlines.
TIING! Discuss travel industry news and meet other industry professionals.
by Katherine Leppard, July 28th, 2011
TIING is a Linkedin networking and information exchange group for directors, owners and senior managers of tour operators, travel agencies and their professional suppliers located in the South East.
The purpose of the group is to share and discuss industry information and developments, share expertise and to provide networking opportunities for its members.
In the current membership there is a diverse group of directors, owners and senior managers in the travel profession including tour operators, agents, lawyers, social media, PR, insurers, recruitment regulatory.
Join the discussions and receive invites to future get togethers at http://www.linkedin.com/groups?gid=3826591&trk=hb_side_g
OFT gets tough on debit and credit card charges
by David Gordon, July 5th, 2011
Many in the travel industry will have seen the announcement last week that the Office of Fair Trading (“OFT”) have come out in favour of a complaint that hidden or excessive credit and debit card fees were unfair. Whilst this is likely to be of immediate interest to those in the travel sector, I suspect that the ruling has far wider implications for all those selling goods and/or services via the internet.
By way of background, the OFT’s ruling was the result of a “super-complaint” raised by the “Which?” organisation who asked the OFT to investigate the practice, adopted by a number of travel companies, particularly airlines, of imposing excessive or misleading card transaction fees on top of the basic sale price. Indeed the OFT estimated that, in 2009, the airline industry alone charged consumers in the region of £300m in card payment surcharges.
The OFT has, not for the first time, sided with the consumer. Whilst it might be regarded as fair to pass on charges imposed by the various card companies, it would appear that the OFT will not tolerate situations where suppliers either seek to hide charges or, effectively make a substantial mark-up on such charges by imposing inflated fees on the consumer.
Clearly, with the internet now an established means of purchasing goods or services, consumers have little option but to pay by card and this will become even more so with the abolition of cheques in due course. Often credit and debit card fees, regardless of their level, are hidden right at the end of the “purchase process”. The consumer may have filled in a number of “pages” before, at the very end, being told about such charges.
In the light of the OFT ruling, I would suggest that all web-based suppliers, particularly those in the travel sector, need to urgently adjust the way their website is set up so that it is absolutely clear, at the outset of a transaction, what further fees will be payable in relation to any purchases (over and above the basic sale price). I would suggest that the same also goes for any delivery charges that suppliers want to make. In addition any such charges must be set at a reasonable level and I believe that it will be open for suppliers to have regard, in setting any such charges, to the level of charges being imposed on them by the relevant card suppliers.
The OFT have warned that they will take enforcement action against any businesses that do not respond to the announcement made by the OFT last week and whilst the OFT ruling is, at this stage, directed at the travel industry in particular, I think it has far wider implications in relation to all internet-based suppliers and we will have to wait to see how quickly the OFT starts to take enforcement action and which particular sectors they look to target initially.
It also remains to be seen which industries take the approach of absorbing card charges within the basic sale price and which choose to continue to make extra charges and, if so, at what level.
By David Gordon
Are the CAA going too far by threatening to refuse claims?
by Katherine Leppard, June 28th, 2011
TTG Digital report from the Aito conference that the CAA say they may refuse claims where customers have not
received the correct documentation from their agents. Read the full article here.
Although this is strictly a requirement of the Atol protection scheme, this suggested approach by the CAA would leave the consumer to claim against the agent which appears to be contrary to the purpose of the Atol scheme which is to protect consumers. It also means that agents may not only have to pay for their Atol licence but also compensation where they cannot prove that an Atol receipt was provided to the consumer.
Agents can avoid the risk of the CAA refusing claims by ensuring that they have a system in place for checking and recording that customers are receiving an Atol receipt where required.
The CAA have recognised the need to produce standardised documents for agents to issue in respect of the Atol receipts which aims to make the process simpler for agents and provide more certainty and clarity to consumers.
Although the CAA can legally refuse claims where the required documentation has not been issued, the threat to refuse claims may seem more reasonable when there are standardised documents for the trade to utilise to assist them to satisfy the requirements under the Atol scheme.
For the time being, it is important for agents to ensure that they have the correct contractual documentation in place so the CAA cannot refuse the claims. If you are unsure whether you have the necessary documents please feel free to contact one of our travel law specialists for more information.