Pirie said the business "fundamentally disapproved" of Abta’s campaign to promote refund credit notes (RCN) in lieu of cash refunds in the absence of government guidance.

Travel sellers are duty bound under the Package Travel Regulations (PTRs) to provide refunds within 14 days where a package can no longer be delivered as sold.

However, the coronavirus crisis and the Foreign Office’s decision to advise against all non-essential travel worldwide as a result has sparked tens of thousands of cancellations, with Abta fearing mass insolvencies – and job losses – if firms are forced to refund clients in the absence of pipeline monies, sending them out of business.

Chief executive Mark Tanzer has remarked on how the regulations were never designed to meet wholesale demands for refunds, and has stressed that should travel firms go to the wall, it will take consumers even longer to get cash back from the Air Travel Trust Fund – already depleted by the collapse of Thomas Cook – and will significantly weaken the sector by reducing choice.

The association has called on travel industry professionals, and supporters of the sector, to lobby their MPs for change, and is hopeful the government will act in the coming days to ease the burden on the travel sector.

Pirie’s It’s Right to Refund campaign, meanwhile, has urged the government not to amend the PTRs and instead offer travel firms a grace period on refunds through 31 July – the date originally laid down by Abta for financial protection on RCNs. This has since started to move back as companies have renewed their financial protection arrangements through to the end of next March (2021).

Vivid’s decision to quit Abta comes after the It’s Right to Refund campaign agreed a fortnight ago to recognise Abta as "de facto regulator" on the refunds debate, stating its code of conduct on refunds in the midst of an unprecedented crisis was the best available approach, and with the government "mute" on the issue.

However, on Wednesday (22 April), Pirie said Vivid wished to "disassociate and distance" itself from Abta, and has removed all references to the association from its website.

"We now see the Abta brand as shattered," said Pirie, managing director of Vivid Travel. "It is associated in the minds of the consumer with an ill-judged attempt to force them to grant over-extended interest-free loans to Abta members.

“We recognise Abta members face enormous financial strain but believe that could have been solved fairly by a simple grace period through to 31 July 2020. I have tried hard to find common ground with Abta, but to no avail. We could have supported the Abta refund credit note proposal provided it did not extend beyond that date, and if the CAA had confirmed it was lawful with full Atol protection."

‘Lot of common ground’

An Abta spokesperson said: "We can confirm Vivid Travel has resigned as a member of ABTA. The company initially joined as a Member in July 2017, then left in October 2019 and rejoined in March 2020."
 
"We find Mr Pirie’s rationale for resigning rather confused. We believe there is a lot of common ground between his position and Abta’s in that he recognises companies cannot pay refunds in 14days, and that customers need to have their refund right preserved and protected. This precisely reflects our guidance.

"We urgently need government action to clarify the situation for all concerned, including on establishing a suitable payment window for refunds. Any end date proposed shouldn’t remove the expectation that customers will be paid without undue delay."

The government is this week expected to confirm RCNs will carry insolvency protection. Abta though remains hopeful of broader changes to the PTRs, as seen in Europe, to ease the situation.