Speaking at Abta’s Travel Law Seminar today, the CAA’s group director of Consumers and Markets Paul Smith also reiterated its call for greater enforcement powers amid the pandemic and following the collapse of Thomas Cook.
“It is important to us at the CAA that we do take time over an appropriate period of time to learn as an industry and a regulator,” he said.
“We recognised both for package organisers and airlines that there were particular challenges at the beginning [of the refunds crisis], and there’s clearly been an ongoing challenge in terms of the interplay between refunds under the PTRs and Regulation 261 (for airlines).
“Where businesses have been able to pay refunds quickly or to a greater degree, from our perspective this has perhaps indicated the business model, balance sheet etc, and I think for us and the industry we need to reflect on how we can think about some of those financial issues and the risks associated with financial structures in terms of the licensing approach that we take, and perhaps over time that will allow the industry to serve customers better in that way.
“This will not be immediate. We continue to apply the same framework as we always have to Atol renewals, but I think part of learning lessons we need to think about how the structure and approach can change over time due to lessons we’ve learned from this and Thomas Cook.”
Smith said while the CAA has “seen through the work we’ve done a much broader range of airlines paying refunds now, and us securing significant improvements in timescales”, the body does believe its enforcement powers are insufficient.
“Richard Moriarty (CAA chief executive) was clear before the select committee a little while ago about that.
“We have an existing case with an airline that goes back to 2018 on 261 matters which has not yet got to court. It just takes far too long for us to take action. We are looking for more upfront powers with rights of challenge to our decisions rather than the process that we have to follow at the moment. We’ve made representations to government and parliament around that.
“A better toolkit would help us in that area.”
Finally, Smith said the CAA did not endorse a return of the flight plus model.
“All our experience tells us customers often don’t grasp the complexity in the protection systems at times so while you could theoretically make an argument for a tiered protection system, we don’t think that’s particularly clear to consumers. This was informed by the Cook collapse in particular.
“The best thing here is simplicity and generally the more complicated, the more difficult. In the future we will probably look at ways we could simplify some of the ways protection works.”
