The Package Travel and Linked Travel Arrangements Regulations 2018 and the Civil Aviation (Air Travel Organiser’s Regulations) 2012 (as amended) require travel companies to provide security for the monies that consumers pay for certain types and combinations of travel arrangements booked with them and for consumers’ repatriation in the event of their insolvency. This means that in respect of all arrangements requiring protection, in the event of the travel company making the booking becoming insolvent, funds will be available to ensure that consumers are not left stranded abroad or will arrange to refund them money they have paid for an advance booking.
Broadly speaking, the effect of the above two pieces of legislation taken together mean that travel arrangements sold as a ‘Package’ or ‘Linked Travel Arrangement’ require tour operator bonding whether or not they include a flight. Packages including a flight will require the seller to hold an Air Travel Organiser’s Licence as well as to carry financial protection.
The definition of a ‘Package’ in the Package Travel and Linked Travel Arrangements Regulations 2018 changed from 1st July 2018, capturing a far wider selection of travel sales:-
Linked Travel Arrangements (LTAs) are combinations of travel service where a trader has facilitated a combination of travel services but where the ties between the services concerned aren’t so close as to mean that a package has been created. There has to be a clear separation of the booking and selection processes of the services making up the LTA, i.e. one booking is fully concluded before the next service is selected.
There are two specific types of LTAs described in the Package Travel and Linked Travel Arrangements Regulations 2018 but overall the main characteristics of an LTA are that:
• At least two different travel services are purchased for the same trip or holiday;
• The purchase does not constitute a package so that it does not fall within any of the package categories (e.g. two travel services are not purchased in a single booking process or at a total price);
• The traveller has separate contracts with the service providers; and
• The trader facilitates the sale in one of the ways described for either specific type of LTA
Sellers of LTAs will need to provide some insolvency protection, but this type of bonding is limited when compared to what’s needed to sell package.
If you sell a charter or a scheduled flight where a ticket isn’t issued straight away and you are not acting as an agent for an ATOL holder, you will need to hold an ATOL yourself and financially protect either with an ATOL Bond or trust account, the monies paid for that flight.
Even if you can be sure of what type of sales you are making, the contractual capacity in which you are making those sales is crucial in assessing whether or not they need to be financially protected. Are you selling arrangements as an agent for another supplier or as the supplier of those arrangements yourself (i.e. you are acting as a principal in the contract)? You may think you are acting as an agent when you’re actually taking on a principal status, which may create obligations on you to financially protect your sales.