The impact of the Covid-19 pandemic upon the travel industry has been unprecedented, but perhaps one of its lasting legacies will be the way in which it has changed how the industry is regulated. We set out below four key areas where regulatory reform will take place in 2022 and which travel companies should look out for.
Review of the Package Travel Regulations (“PTRs”)
There are currently reviews ongoing into changing the PTRs – both in the UK and the EU. The UK review has been carried out by BEIS and looks likely to lead to proposals concerning the definition of a Package and a Linked Travel Arrangement, simplification of the mandatory pre-booking information requirements and some more flexibility for organisers in how they may provide insolvency protection for non-flight packages. These proposals are likely to be shared with the industry for consultation in the New Year.
The EU is also at the beginning of its review of the Package Travel Directive, with a consultation due to be published imminently, following which the intention is to make proposals to amend the Package Travel Directive by the end of 2022.
Earlier this year, the Civil Aviation Authority (“CAA”) published its first consultation on reforming the ATOL regime, which we summarised in an earlier article (see here). The CAA wishes to consider changing the ATOL regime so that it improves the financial resilience of ATOL holders and makes them less dependent upon customer money as a source of funding working capital. This should also help achieve another objective for the CAA, which is to see ATOL holders better able to pay refunds for cancelled holidays.
The CAA is due to publish its response to the industry’s response to the consultation in the New Year and then set out the next steps for what is likely to be the most significant reform of the ATOL regime since 2012.
Reform of the enforcement of consumer law (including the PTRs)
The enforcement tools available to UK and EU regulators to punish travel companies for non-compliance with consumer protection laws are set to be radically overhauled in 2022.
New EU laws will come into force to give EU regulators the power to impose fines of 4% of annual turnover. The UK regulators are set to be given even tougher sanctioning abilities with the Government having recently consulted on giving regulators the power to impose fines of 10% of global annual turnover. The outcome of this UK consultation, and the proposed next steps, are set to be published in early 2022.
Further information on these developments can be found in our three-part series on the subject (see here), which we will be covering in more detail at our New Year webinar (see here).
Department for Transport (DfT) consultation on consumer rights in the aviation sector
The DfT is due imminently to launch a consultation on consumer protection in the aviation sector. With many travel companies having called for better enforcement of the airlines’ refund obligations during the pandemic, this is likely to be an issue to look out for in this consultation.
With all these significant regulatory developments on their way, 2022 will be one of the most significant the industry has faced in terms of regulatory reform. We shall be following these developments closely and keeping our clients informed throughout.
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