Published on Monday, January 25, 2021

CAA extends ATOL protection for Refund Credit Notes

The Air Travel Trust has extended ATOL protection for new refund credit notes issued up to 31 March 2021, following continued disruption to the travel industry.

The Civil Aviation Authority said this means consumers whose package holiday bookings are cancelled will be able to accept a refund credit note. Consumers continue to remain entitled to a cash refund should they not wish to accept a refund credit note.

Protection for new refund credit notes issued had previously been extended to 31 December 2020, and then to 31 January 2021, in recognition of disruption to the travel industry.

The same conditions as previously advised to travel companies will apply to refund credit notes: they must be issued for a cancelled ATOL protected booking; the booking must have been cancelled by the tour operator due to the coronavirus pandemic; and the refund credit note must be able to be exchanged for cash at a later date

Currently, all valid refund credit notes issued up to the 31 March 2021 will benefit from ATOL protection until 30 September 2021, at which point Government backing for their ATOL protection will cease.

Consumers should exchange their refund credit note for cash or use it to purchase an ATOL protected booking before this date.

The Civil Aviation Authority said the Air Travel Trust recognises that depending on future developments it is possible that some consumers may not be able to redeem their refund credit notes before this date and is engaging with the Government to discuss this issue and how it might best be addressed.

Travel businesses are reminded that they must notify the Air Travel Trust of any refund credit notes issued by completing the appropriate forms.

Paul Smith, Consumer Director at the UK Civil Aviation Authority said: "We recognise that changes to government restrictions on travel have an unprecedented effect on ATOL holders and on consumers with ATOL protected bookings. In light of these circumstances, we have extended ATOL protection for refund credit notes.

"This will allow for travel companies to offer their customers refund credit notes in good faith and mean that consumers will not be at financial risk if they choose to accept a refund credit note rather than a cash refund," he said.

By Louise Longman, Contributing Editor (UK)