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Financial Protection under the new PTD following Brexit

The new Package Travel Directive (PTD),  is due to come into force on the January 1, 2018 and following this, the UK is obliged to implement the Directive into its own domestic legislation. As it’s very likely the UK will still be part of the EU by the time that has taken place, the new legislation will remain in force even after the UK has negotiated an exit form the EU. 

That said, the recent failure of the Lowcostholidays group may mean that the UK Government may look again at parts of the proposed legislation, particularly in relation to financial protection. Mallorca-based Lowcostholidays ceased trading on July 15 and traded in the UK outside the ATOL scheme, leaving consumers less protection for their forward payments than would have been the case had they been part of the scheme.

The UK has always been a leader on issues of financial protection for consumers: taking the helm on such matters in the PTD and in its own domestic legislation, the ATOL Regulations 2012, to expand and clarify financial protection of forward payments for sales of multiple elements of travel components. It’s likely therefore that they will want to preserve their status on such matters by trying to ensure that companies selling to UK customers have financial protection arrangements in place that are at least as solid as those applicable to companies domiciled in the UK.

This month, The Air Travel Insolvency Protection Advisory Committee (ATIPAC) wrote to the government urging it proceed with plans to implement the PTD despite the UK vote to leave the EU and one can only imagine that is part of the reason why.