The commission issued an official recommendation for RCNs, or "vouchers", on Wednesday (13 May), which will apply in the UK through to the end of the current Brexit transition period (1 January 2021).
It also provides guidance on the use of RCNs and vouchers, and urges member states – including the UK while the transition period continues to apply – to "cooperate towards its implementation".
Protection for package bookings is governed by the Package Travel Regulations, the UK’s interpretation of the EU Package Travel Directive, which will cease to apply to the UK from the start of next year.
RCNs are, in essence, a deferred refund that can be used to rebook a holiday, or be exchanged for a full cash refund at a later date. Abta has stressed customers have an absolute right to a refund for a cancelled package booking, and where requested, that these refunds should be given "as soon as businesses are able to".
On Thursday (14 May), Abta subsequently renewed its call for the government and the CAA to publicly endorse RCNs, and confirm they offer the same level of protection as the original booking, which the association says is set out in the Air Travel Trust Fund payment policy. The CAA, while understood to be aligned with Abta on the issue, is yet to state whether this the case.
Mark Tanzer, Abta chief executive, said: "That the European Commission has endorsed the correct use of financially protected refund credit notes should help give additional confidence to UK holidaymakers that they can be trusted to provide the same protection as the original holiday booking.
"We now need the UK government and the CAA to come out and confirm their status, which the industry has long been waiting for.”
Abta has been campaigning for the rules around package travel, such as the requirement to provide refunds within 14 days, to be relaxed – as they have been in more than a dozen European countries – owing to cash flow issues arising from the coronavirus crisis.
The association has repeatedly stated its belief that enforcing the 14-day refund rule under the PTRs would result widespread failures, which would place additional strain on the CAA and the Atol scheme and ensure it takes even longer for consumers to get their money back.
"Many tour operators don’t have the cash to pay customers a cash refund in a 14-day period as they have not yet received money back from hotels, airlines and other suppliers affected by the crisis," said Abta.
"Forcing them to do so would put many of them out of business, which would mean customers would not get their money back for many more months as the Government-backed Atol scheme of financial protection could not cope with the sheer volume of refunds. It would also result in significant long-term damage to the UK travel industry."
Abta has championed a temporary RCN scheme to "buy more time to process and provide refunds"; it has issued guidance to members to ensure it is implemented consistently and in a way that makes sure both customer’s right to a refund, and the booking’s original financial cover, is protected.
The association acknowledged on Thursday (14 May) "recent confusion" around the situation, which it said stemmed from the government and the CAA failing to "come out publicly to reconfirm their position on the issue since the start of the crisis".
"This is despite the Air Travel Trust Fund payment policy [Section 4.2] stating deferred refunds remain financially protected, which the package holiday advice on the CAA website also refers to," said Abta.
